Article 3 of the OECD Model Tax treaty concerns the general definition used throughout the Convention. Important terms like a resident and permanent establishment are defined in separate Articles (Article 4 and 5 respectively), whereas specific articles define few.

Today we will discuss the following points :
- List of terms provided under Article 3 of the OECD Model Tax Treaty.
- Definition of Person
- Definition of Company
- What is Enterprise?
- What is international traffic?
- Who is Competent authority?
- Who is national?
- What is Business?
- Which is a recognized pension fund?
- How to deal with general terms not defined under Article 3 of the Tax Treaty?
List of terms provided under Article 3 of the OECD Model Tax Treaty.
OECD Model Tax treaty covers the following terms: Person, Company, Enterprise, international traffic, Competent authority, national, business, and recognized pension fund.

Definition of Person
It includes individuals, companies, and any other body of persons. Subparagraph b of Paragraph 1 of Article 3 defines the company. The body of persons consists of a wide array of arrangements made between people, although the entity is not incorporated. Hence partnership and trusts would also be included for tax purposes.
Define Company
According to Paragraph 1 of Article 3, the term company is anybody corporate and also any other taxable unit that is treated as a body corporate under the domestic tax laws of the Contracting States.
What is Enterprise?
Term enterprise applies to the carrying on of any business (Subparagraph c of Paragraph 1 of Article 3 of the OECD Model Tax treaty). Business is specifically covered by Article 3.
What is international traffic?
Article 8 deals with the concept of international traffic. According to Article 3, international traffic means any transport by a ship or aircraft between different countries. It does not include domestic transportation undertaken by the vessel or the plane or the transport between foreign countries when the enterprise is not a resident of the Contracting States. After the amendment in 2017, the definition includes the transportation of ships or aircraft operated by an enterprise of a third state. This amendment impacts paragraph 3 of Article 15, which deals with remuneration earned by the employees in the ship or aircraft.

Who is Competent authority?
Many OECD member countries’ double taxation cases are dealt with by other authorities and not the highest tax authorities. This definition charts out the competent authorities for the bilateral treaty to be designated and assigned by the Contracting States
Who is national?
As per Article 3, an individual is a national if he possesses the nationality or citizenship of the Contracting state. Nationality and citizenship are unexplained as the meaning is to be derived based upon the domestic laws of the contracting states. Article 3 further states the legal persons, partnerships, and associations are to be treated as National if its identity based upon the law of the contracting state. This helps in bifurcating the nationality of the entity from the nationality of the people owning/controlling the entity.
What is Business?
The business is inclusively defined as it is a broad terminology. It specifically includes the performance of professional services and any other activities of the independent character.
Which is a recognized pension fund?
The recognized pension fund is an entity that is registered as a separate taxable entity under the taxation law of the Contracting State. It further states that either the entity is established and operated exclusively to provide retirement benefits and ancillary services to individuals and is regulated by the state (including its political subdivisions) or the entity is established and operated solely to invest funds for the benefit of entities mentioned above.

How to deal with general terms not defined under Article 3 of the Tax Treaty?
For the undefined terms used in the bilateral treaty, the meaning is to be derived from the domestic legislation, which is in force when the tax is imposed. The local law meaning is to be applied when the context does not call for alternative interpretation, and the competent authorities do not agree for the different understanding.