Tax treaties

Discussion draft released on 2005 Update to the Model Tax Convention

 

15 March 2005

The OECD Committee on Fiscal Affairs has just released the draft contents of the 2005 update to the OECD Model Tax Convention.

 

The OECD Model Tax Convention, which is the basic document for the negotiation, application and interpretation of the global network of bilateral tax treaties that govern taxation of cross-border income and capital, is updated periodically to take account of new developments. The last update was approved in January 2003 and the next update will be finalized in the spring of 2005.

 

As part of the OECD Committee on Fiscal Affair' well-established policy of consulting with business and other interested parties, all the changes to the Articles and the Commentary that will be included in the next update are issued as a draft for a final round of public comments even if most of them have already been released  separately.

 

The contents of the 2005 update result primarily from the following previously released documents:

  • "Proposed changes to the Commentary on Article 8": that report was first released for public comments in April 2004. A few changes were made on the basis of the comments received and the final version of the report was made public on 15 December 2004.
  • "Cross-border income tax issues arising from employee stock-option plans": the final version of that report, which was approved by the Committee on Fiscal Affairs on 16 June 2004, was made public on 3 September 2004. The final version took into account comments received on two previous drafts of the report which had been made public in March 2002 and July 2003. 
  • "Proposed changes to the Commentary on Article 5 concerning multiple permanent establishments": a draft version of that report was released for public comments on 12 April 2004.  A number of changes were made on the basis of the comments received, which were supportive of the amendments to the Commentary proposed in the draft.  This note includes the final version of the amendments (changes made to the April 2004 draft are underlined in the note) 
  • "Changes to Articles 25 and 26 of the Model Tax Convention". the document that includes these changes was approved by the Committee on Fiscal Affairs on 1 June 2004 and made public on 23 July 2004. 
  • "Technical issues related to cross-border pensions": a draft version of that report was released for public comments on 14 November 2003.  A number of changes were made on the basis of the comments received. This note includes the final version of the amendments (changes made to the November 2003 draft are underlined in the note)

The update also includes a number of  other technical changes to the Model Tax Convention:
The draft does not include changes to the observations and reservations of OECD Member countries and to the positions of non-Member countries that will be included in the Model Tax Convention as part of the final version of the update. 

 

Comments on the 2005 update to the Model Tax Convention should be sent before 27 April 2005. The Committee on Fiscal Affairs will review the update in light of these comments. The comments received will be published on the OECD web site; it is the policy of the OECD to publish all comments received with the name of their author and anyone wishing to remain anonymous or to keep their comments confidential should say so expressly.

Comments on the 2005 update to the Model Tax Convention should be sent before 27 April 2005 to.
Jeffrey Owens
Director, CTPA
OECD
2, rue André Pascal
75775 Paris
FRANCE
e-mail: jeffrey.owens@oecd.org

 

Related Documents

 

Draft of the 2005 Update to the Model Tax Convention

 

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