Introduction to the Law of Double Taxation Conventions

S. 11413. Non-discrimination

13.1. Scope of application of non-discrimination rules

476

DTCs also contain non-discrimination rules. Art. 24 is the relevant rule in the OECD Model. It provides certain specific grounds that cannot be relied on by a state to discriminate for purposes of taxation. In relation to nationals of the treaty partner state, Art. 24 OECD Model prohibits discrimination by reason of nationality (para. 1) and contains similar protection for stateless persons (para. 2). In relation to residents of the other contracting state, Art. 24 OECD Model prohibits discrimination against PEs belonging to (para. 3), against deductions of certain payments and debts to (para. 4), and against enterprises owned by residents of the other contracting state (para. 5).

477

Art. 24 OECD Model prohibits only overt discrimination which meets the specific criteria of the non-discrimination provisions. If domestic law contravenes a non-discrimination rule, the domestic law is ousted when the DTC is applied. The DTC provisions regarding non-discrimination rules have priority.

478

Under Art. 24(6) OECD Model, the non-discrimination rules are not limited by Art. 2 OECD Model. Consequently, the non-discrimination ...