About this book:
Tax Treaty Residence of Entities provides a thorough examination of the treaty rules on the residence of entities, Article 4 of the OECD Model Convention (OECD MC). Changes to the OECD MC have raised questions about the concept of residence as it applies to entities. It is of great importance to be able to determine who or what is considered ‘resident’ within the meaning of tax treaty provisions. However, the concept of residence has never been fundamentally adjusted to current circumstances in which technological developments make it possible for corporations to explore the wide gap between their actual business operations and the ‘legalistic’ requirements for corporate residence. In this study of the OECD MC – the basis for most tax treaties – the author develops a clear understanding of the content of the residence concept as regards entities and proposes solutions to current problems, finishing with his own thoroughgoing definition.
What’s in this book:
In seeking a definition of the term ‘resident’ that covers all uses in treaties, the analysis draws on, in addition to the current and earlier iterations of the OECD Model Law itself, such elements as the following:
- domestic law meaning of residence in the tax law of France, Germany, the Netherlands, the United Kingdom and the United States;
- Articles 31 and 32 of the Vienna Convention on the Law of Treaties;
- historical documents that uncover the ordinary meaning of treaty terms;
- tax treaty case law and court decisions; and
- fiscal, tax and legal scholarship surrounding the concept of residence for taxation purposes.
The analysis includes a comprehensive description of tiebreaker rules, various perspectives on ‘place of effective management’ and policy considerations as to the further development of the treatment of entities under double tax conventions. It deals with the various perspectives on ‘place of effective management’.
How this will help you:
Given the inordinate importance of the definition of ‘resident’, the differences in interpretation to which the current definition gives rise and the economic developments that call for an evaluation of the provision, this thorough examination of the treaty rules on residence of entities will be welcomed by tax lawyers, corporate counsel and policymakers and academics concerned with tax law. The author’s guidance on the concept of residence for tax purposes and his original proposals for reform will prove to be of great practical value for tax practitioners.
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List of Abbreviations
Purpose, Methodology and Structure
Framework for Interpretation of Article 4 OECD MC
The History of the Residency of Entities under Model Tax Conventions
The Use of the Provisions on Tax Treaty Interpretation in This Study
Object and Purpose
Interpretation of Article 4 OECD MC
Entities as Residents for Tax Treaty Purposes (Article 4(1))
Entities as Residents for Tax Treaty Purposes under the Tie-Breaker Rule (Article 4(3))
A Novel Resident Definition
Prerequisites for a Novel Definition of Resident
A Novel Resident Definition
Table of Cases
Documents League of Nations (Retrieved from www.taxtreatieshistory.org)
Documents OEEC and OECD (Retrieved from www.taxtreatieshistory.org Unless Explicitly Referred to Another Source)