OECD Releases Discussion Draft on Tax Treaty Issues Related to REITs

30 October 2007 -- The use of Real Estate Investment Trusts (REITs) has significantly expanded worldwide, and more and more countries are introducing rules to facilitate the use of REITs. The importance and the globalisation of investments in and through REITs have led the OECD to examine the cross-border tax issues that such investments raise for tax treaties. An informal technical group of tax officials and experts from the REIT sector was mandated by the OECD Committee on Fiscal Affairs to prepare an analysis of the issues related to the application of tax treaties to REITs and to present suggestions for additions to the Commentary of the OECD Model Tax Convention, including possible alternative provisions dealing with REITs that States wishing to do so could include in their bilateral treaties. That group's report was presented to Working Party No. 1 on Tax Conventions and Related Questions, which is the sub-group of the OECD Committee on Fiscal Affairs that is responsible for updating the OECD Model Tax Convention. The report has now been approved for release as a public discussion draft, and interested parties are invited to send their comments on the discussion draft by 15 January 2008.