Access to Treaty Benefits

S. 1541. Introduction

It is well known that treaty benefits are reserved for persons who are resident of one (or both) contracting state(s). Being compliant with this requirement therefore represents the key condition for a person to be entitled to such benefits. It is clear, however, that even after having satisfied this requirement, the entitlement to treaty benefits is not per se guaranteed given that there are some other rules, mainly of an anti-abusive nature, that limit treaty access.

The following analysis of Article 4(1) of the OECD Model Tax Convention on Income and on Capital (hereinafter OECD MC) and the OECD Commentary (the Commentary) represents a crucial element for everyone wanting to approach international taxation and tax treaty law as any interpreter will encounter the numerous issues of this controversial provision countless times in the course of his experience.

The analysis of this provision will be primarily carried out bearing in mind the so-called liability-to-tax principle since Article 4(1) OECD MC entwines the definition of “residence” with the concept of being (fully) liable to tax in (at least) one of the contracting states.

It is worthwhile to report the full te...