The OECD-Model-Convention and its Update 2014

I. S. 202Introduction

From the perspective of the Austrian tax administration, all changes proposed in the text of the 2014 OECD Model are acceptable and will thus be considered in future treaty negotiations, as well as in a revised Austrian Model Convention. The new wording of articles 10, 11 and 17 is of a mere linguistic character and will not cause any questions of interpretation in substance. The last sentence which was recently added to article 26(2) has already been used in Austrian tax treaty practice in light of Austria’s commitment to the OECD standard.

As far as the new Commentary is concerned, Austria made an observation on the new Commentary on Article 13 concerning the taxation right on capital appreciation generated in Austria before the entry into force of a new tax treaty.

The concept of beneficial owner as described extensively in the new Commentary on Articles 10, 11 and 12 is, in principle, in line with the Austrian domestic doctrine on allocation of income, which provides for allocation of income to the person who has the power of disposal over the relevant income, and excludes agents or nominees from being treated as beneficial owner. Therefore, the interpretation of t...