UN tax committee releases proposed updates to model tax treaty in advance of meeting

By Julie Martin, MNE Tax

The UN today released six documents in advance of the eighteenth session of the UN Committee of Experts on International Cooperation in Tax Matter, to be held April 23–26 in New York.

The documents, mostly written by subcommittees,  include a paper discussing possible updates to the UN Model Double Taxation Convention between Developed and Developing Countries commentary on permanent establishments.  A subcommittee charged with proposing updates to the Model is seeking committee input on whether the commentary to Article 5 of the UN Model should be updated to reflect changes that were incorporated into the 2017 OECD Model Commentary. These changes are unrelated to the OECD’s Action 7 BEPS plan work. The update would also renumber paragraphs of quoted OECD commentary in the UN commentary so that it is consistent with the most recent OECD commentary.

A subcommittee paper presenting a high-level discussion of the issue of beneficial ownership was also released. The paper notes that in 2014 beneficial ownership was clarified in the OECD model treaty. The paper considers whether an update should also be provided in the UN treaty. 

Another paper provides two draft chapters for a handbook on carbon taxation under development by the committee. The chapters address the design of a carbon tax and administrative issues arising from the introduction of a carbon tax. Feedback is sought from the committee to advance the work. 

A chapter on the tax treaty mutual agreement procedure for the proposed United Nations Handbook on Dispute Avoidance and Resolution was also released. The chapter will be presented for discussion and final approval at the committee meeting. A preliminary draft of the chapter had been presented at the seventeenth session and this latest draft reflects decisions reached by the subcommittee following that discussion, the paper said

A revised version of the Manual on the Negotiation of Tax Treaties between Developed and Developing Countries was also released. The Committee of Experts will be asked to approve this version of the manual at their meeting. The manual was last updated in 2016.  
 
Finally, note by the Secretariat, titled “Follow-up note on the role of taxation and domestic resource mobilization in achieving the Sustainable Development Goals,” was released which concludes that the work of the Committee of Experts can further assist all countries in their efforts to implement the 2030 Agenda and the Addis Ababa Action Agenda by helping to generate clear, evidence-based policy guidance on how to support the pursuit of sustainable development through taxation in the broader context, beyond domestic resource mobilization.
 
Three critical areas in which the Committee of Experts could provide further guidance and support to all countries were identified as: taxation and environmental protection; taxation of the informal economy; and taxation and gender equality, the note said.

 

Julie Martin

Julie Martin

Founder & Editor at MNE Tax

Julie Martin is the founder of MNE Tax. She edits the publication and regularly contributes articles on new developments in cross-border business taxation.

Julie has worked as a tax journalist and editor for more than 13 years. Prior to that, she worked as an in-house tax attorney in New York. She also holds an LLM in taxation from New York University School of Law.

Julie can be reached at jmartin@mnetax.com.

Julie Martin
Julie can be reached at jmartin@mnetax.com.


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