OECD Releases 2017 Updates to Model Tax Convention | KPMG | CA
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OECD Releases 2017 Updates to Model Tax Convention

OECD Releases 2017 Updates to Model Tax Convention

The OECD released the draft contents of the 2017 update to its Model Tax Convention.


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The OECD expects to release the final, updated, version of the OECD Model Tax Convention later this year. The OECD notes that significant parts of the 2017 update have already been approved as part of the OECD's Base Erosion and Profit Shifting (BEPS) package. The OECD is accepting comments on previously un-released portions of the draft until August 10, 2017.

Updates to the 2017 update to the Model Tax Convention that are currently open for comments cover:

Revisions to the tie-breaker rules

  • Commentary on homes rented to an unrelated person and whether they should be considered "permanent homes available to" the landlord under the tie-breaker rule in Article 4(2)(a) 
  • Commentary clarifying the meaning of "habitual abode" in the tie-breaker rule in Article 4(2)(c).

Other revisions

  • A new paragraph indicating that registration for a value added tax or goods and services tax is irrelevant when applying or interpreting the "permanent establishment" definition 
  • Changes intended to allow a reduced rate of source taxation on dividends in certain circumstances, with the deletion of "(other than a partnership)" from subparagraph (2)(a) in Article 10 and new paragraphs added.

For more information, contact your KPMG adviser.

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