According to ECOSOC resolution 2004/69, the Committee of Experts on International Cooperation in Tax Matters (“the Committee”) is mandated to keep under review and update as necessary the United Nations Model Double Taxation Convention between Developed and Developing Countries.
Double tax treaties (or conventions) are bilateral agreements between two countries, which allocate taxing rights over income between those countries, thereby preventing double taxation of income. The prevention or elimination of double taxation is a significant aspect of the investment climate of countries, which is essential for investment flows, the exchange of goods and services, the movement of capital and persons, and the transfer of technology.
Double tax treaty models are generally used by countries as a starting point when negotiating bilateral tax treaties. The United Nations Model Convention and the Organization for Economic Co-operation and Development (OECD) Model Tax Convention on Income and on Capital (the OECD Model Convention) are the two most widely used models. They are the source for most of the more than3,000 tax treaties currently in force, thus providing a profound influence on international tax treaty practice. The United Nations Model Convention tends to be relied upon more by developing countries, while the OECD Model Convention tends to be relied upon more by developed countries though elements of the UN Model have influenced the OECD Model and OECD Member country practice.
While many provisions of the United Nations Model Convention and the OECD Model Convention are similar or identical, the Models diverge in important areas, reflecting the different memberships and priorities of the two organizations. In particular, the United Nations Model Convention tends to preserve greater taxing rights for the “source” country where profits arise, with the “residence” country of the person making the profits having to give a credit for taxes paid or an exemption from taxes on those profits.
- United Nations Model Double Taxation Convention between Developed and Developing Countries (2011 update)
- Revised Article 26 (Exchange of Information)
- New Article 27 (Assistance in Collection)
- Revision to Commentary on Article 11 (Interest)
- Revisions to Paragraph 5 of Article 13 (Capital Gains) and to Commentary on Article 1 (Scope): Improper Use of Treaties
- Revised Commentary on Existing Article 5 (Permanent Establishment)
- Article 13: capital gains
- Assistance in the collection of taxes (Article 27) and its commentary
- Definition of permanent establishment
- Dispute resolution
- Exchange of information
- Improper use of treaties / Treaty abuses and Treaty shopping
- Tax treatment of services
- Treatment of Islamic financial instruments
- United Nations Model Double Taxation Convention between Developed and Developing Countries (2001)(ST/ESA/PAD/SER.E/21)