Tax Treaty Case Law around the Globe 2019
1. Aufl. 2020
Besitzen Sie diesen Inhalt bereits,
melden Sie sich an.
oder schalten Sie Ihr Produkt zur digitalen Nutzung frei.
S. 2061. Introduction
Article 11 of the OECD and UN Models lays down the rules for allocation of taxing rights in respect of interest. The primary right of taxation is with the country of residence but the country of source is given a secondary right to tax if it so wishes at a lower rate but on a gross basis and in that event, the country of residence will give a tax credit in respect of the tax paid in the source state. While the OECD Model fixes the maximum rate of tax by the source country at 10 %, in the UN model the rate is to be negotiated by the parties. Many capital exporting countries would like the interest to be taxed only in the country of residence in the interest of free flow of capital. Source countries having an adverse balance position in respect of mutual trade and investment would like to retain some taxing right. However, the income concerned must first of all correspond to the definition of interest as given in the relevant tax treaty. And in the tax treaties, apart from income from government securities, bonds and debentures that are specifically mentioned as interest, the income must arise from a debt claim whether secured or not. The term debt claim is however not...