The OECD council on November 21 approved a 2017 update to the OECD model tax convention. These changes will be incorporated into the model and published in the next few months, the OECD said.
The update implements changes approved in 2015 as a result of the OECD/G20 base erosion profit shifting (BEPS) plan which expand the definition of of the permanent establishment, add new provisions designed to curtail tax treaty shopping, and improve the mutual agreement procedure (MAP) for resolving tax treaty disputes, including MAP arbitration.
The 2017 update also includes changes to the Commentary on Article 5 integrating the changes resulting from the work on Action 7 of the BEPS project with previous work on the interpretation and application of Article 5.
Further, the update changes Article 8 concerning the definition of “international traffic” and paragraph 3 of Article 15, concerning the taxation of the crews of ships and aircraft operated in international traffic, and to Articles 6, 13 and 22.
The update further changes Article 4, the commentary to Article 5, and Article 10, as announced in a July 11 public release.
The update also also includes the changes and additions made to the observations and reservations of OECD member countries and to the positions of non-OECD economies.
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