Introduction to the Law of Double Taxation Conventions

S. 12917. Inheritance tax treaties

17.1. Structure

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In addition to the OECD Model on Income and on Capital (hereafter OECD Income Tax Model), there is an OECD model in the field of estate, inheritance and gift taxes (hereafter OECD Inheritance Tax Model). It was published in 1966 and modified in 1982 (cf. m.no. 24). Gift taxes were not included in the substantive scope of the model until 1982. In practice, taxes on income and on capital, on the one hand, and estate, inheritance and gift taxes, on the other hand, are regulated by different DTCs. The conclusion of a common DTC remains an exception (e.g. Germany’s DTCs with Denmark and Sweden, and many French DTCs). However, there are academic aspirations to build a unitary system (common approach) of the two existing OECD Model solutions (cf. Szczepański, Intertax 2018, 766 et seq.).

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The structure of the existing OECD Inheritance Tax Model is similar to that of the OECD Income Tax Model. When the person and the respective taxes are covered by the DTC, one of the allocation rules definitely applies. The method article (Art. 9A or 9B OECD Inheritance Tax Model) will determine whether double taxation is avoided by the credit or the exemption meth...