OECD model agreement: Basis for double taxation agreements.

What is an OECD model agreement?

The OECD Model Agreement is a model agreement developed by the Organization for Economic Cooperation and Development (OECD) to avoid double taxation. It serves as a template for bilateral double taxation agreements (DBAs) between two countries and was first published in 1963.

Content of the OECD Model Agreement

The OECD Model Agreement sets out the principles and rules to be taken into account when allocating taxation rights between the participating countries. It covers a variety of topics, such as the definition of tax-relevant terms, the method for avoiding double taxation, the exchange of information between the participating states and the settlement of tax disputes.

Benefits of the OECD Model Agreement

The OECD Model Agreement offers several advantages. First, it provides a uniform basis for negotiating DBAs between different countries. This makes the negotiation process easier and at the same time reduces the number of discrepancies between the various DBAs. Second, it promotes international cooperation and exchange of information, which in turn helps to combat tax evasion and tax avoidance.

Scope of the OECD Model Agreement

The OECD Model Agreement is used by many countries as the basis for their bilateral DBAs. However, the provisions are not binding and each country can choose which elements of the model agreement it wants to include in its DBAs. In addition, countries may also make changes or additions to the model regulations to take account of their country's specific requirements.

synopsis

Overall, the OECD Model Agreement is an important instrument for avoiding double taxation and promoting international cooperation on tax issues. It provides a uniform basis for negotiating DBAs between different countries and promotes the exchange of information between the participating states.