The Organisation for Economic Cooperation and Development (OECD) and United Nations (UN) have now both published updates to their respective Model Tax Conventions on income and capital. These Models form the basis for negotiations between territories in agreeing bilateral double tax treaties. These treaties provide for how much the two countries are prepared to forego taxing rights that would be available under domestic law, with a view to avoiding double taxation, preventing tax evasion and avoidance, and encouraging investment.
The Models include pro-forma Articles supplemented by Commentaries which provide vital guidance on interpretation that are often used in relation to agreed treaties (whether bilateral or multilateral).
Here, we compare the background to the two Models and looking at the new Principal Purpose Test and entitlement to benefits.
Read more in the attached PwC Tax Policy bulletin.