OECD/UN Model & Treaty Advisory

Most treaties follow either the OECD Model or the UN Model, with negotiated departures. The OECD Model favours the residence country; the UN Model gives more taxing rights to the source country and is common in treaties involving developing economies. We read the actual treaty, not the model, but we use the model commentary to interpret articles that the treaty leaves unchanged.

The Multilateral Instrument (MLI) modifies many treaties in the same way at once — adopting the principal purpose test, changing permanent establishment rules, and updating dispute resolution. We map which MLI positions apply to each of your treaties so you are not relying on a text that has already been amended.

Treaty relief depends on the recipient being resident in a treaty country. Dual residency is resolved by the tie-breaker articles — permanent home, centre of vital interests, habitual abode, nationality. We set and document the residency position before claiming relief, because relief claimed and denied is worse than relief never claimed.

Limitation-on-benefits and principal purpose tests stop treaty shopping. We test the holding structure against them and, where a structure fails, restructure so the relief is available on the merits.

A fixed place of business, a dependent agent, or a construction project over the threshold can create a permanent establishment — and with it, a filing obligation in a country where the group did not intend to be taxable. We test the group's sales, people and contracts against the PE articles before the exposure arises.

Where a PE exists, we attribute profit to it under the authorised OECD approach and file accordingly. Where one is close, we restructure the activity so it stays below the threshold.

Withholding rates on dividends, interest and royalties are set by the treaty, not by domestic law alone. We route payments through the treaty network that gives the lowest defensible rate, document entitlement, and handle the relief-at-source or refund process in each country.

A treaty map for your flows, a residency and entitlement memo, a PE exposure assessment, an MLI position summary, and the withholding plan. The deliverable is relief that is available, documented and defensible.