Article 17 of MLI – Corresponding Adjustments

What is the corresponding adjustment? When the contracting jurisdiction carries out the adjustment in the price between the associated enterprises, it may lead to economic double taxation. The enterprise in a Contracting jurisdiction whose profits are revised upwards will be liable to tax on profit already taxed in the hands of its associated enterprise in … Continue reading Article 17 of MLI – Corresponding Adjustments →

Article 15 of MLI | Person Closely Related to an Enterprise

The phrase ‘person closely related to an enterprise’ plays a critical role in applying Article 12, Article 13, and Article 14 of MLI. Article 15 of MLI defines this phrase based on the text of Article 5(6)(b) of the OECD Model Tax Convention as set out on pages 16 and 17 of the Action 7 … Continue reading Article 15 of MLI | Person Closely Related to an Enterprise →

Article 14 of MLI | Splitting up of Contracts

Splitting up of contracts is a strategy used for artificial avoidance of Permanent Establishment. Action 7 report notes that as a common strategy for avoiding PE through abuse of Article 5(3) of the OECD Model Tax Convention. Article 14 of the MLI provides to curb this abuse explicitly. Article 14(1) of MLI – Splitting up … Continue reading Article 14 of MLI | Splitting up of Contracts →

Article 11 of MLI | Country’s right to tax its residents – Savings Clause

Two countries enter into a tax treaty to allocate the taxation rights between them about cross-border income. It is applicable when a resident of one country derives income from another country. Most articles of the treaty regulate or limits the source-based taxation rights of the country. The domestic tax laws always regulate residence-based taxation. To … Continue reading Article 11 of MLI | Country’s right to tax its residents – Savings Clause →

Dividend Transfer Transactions – Article 8 of MLI

Article 10 of the OECD Model Tax Convention and United Nations Model Convention deals with the taxation of dividends. OECD and G20 in BEPS Action 6 report recommended the changes to be incorporated in dividend taxation provisions to remove the effects of tax abuse created by comprehensive tax planning. Article 8 of Multilateral Instruments is … Continue reading Dividend Transfer Transactions – Article 8 of MLI →

Methods of Eliminating Double Taxation – Introduction

Some of us have been there, right? Tax notice from one country after paying tax in another country! How outrageous are the demands! A prestigious college in the USA invited my friend as guest speaker, the fees received was after considering the USA tax. Also, in the UK, she was expected to pay tax! … Continue reading Methods of Eliminating Double Taxation – Introduction →

Article 18 | Taxation of Pension

Growing old might have a fair share of pain and pleasure. It is a mix of joy on retirement, commencing second innings, and spending ample time on things you love. Though the person has retired, the tax department will not stop poaching. So here comes the taxation on the retirement income, i.e., the beloved pension. … Continue reading Article 18 | Taxation of Pension →

Directors’ Fees | Article 16 | OECD Model Tax Convention

Article 16 The taxation on pay-out received by the members of the board of the company is mentioned under Article 16 of the OECD model tax convention. As the members of the board might provide services in multiple locations, identifying the taxing jurisdiction will be a difficult job. To simplify, the provisions of Article 16 … Continue reading Directors’ Fees | Article 16 | OECD Model Tax Convention →

Income from Employment | Article 15 | OECD Model Tax Convention

Income from Employment | Article 15 | OECD Model Tax Convention The immediate impact of global business is the cross border movement of employees. When people move across the countries because of employment, more than one State is interested in gaining the tax. Salary The general rule of taxation of salary Exceptions to the general … Continue reading Income from Employment | Article 15 | OECD Model Tax Convention →

Capital Gains | Article 13 | OECD Model Tax Convention

https://www.youtube.com/watch?v=jrCBU10mVPk Capital Gains as per Article 13 of the OECD Model Tax Convention Comparison of taxation practices prevalent in the OECD Member countries shows the varied taxation practices adopted by states with respect to capital gains taxation. Some countries have adopted No-taxation policy on the Capital gains, whereas some would tax only the enterprises for … Continue reading Capital Gains | Article 13 | OECD Model Tax Convention →