Tax Treaty Case Law around the Globe 2016

S. 227Chapter 19 Austria: Termination Payments

Michael Lang, Selina Siller and Stephanie Zolles

19.1. Introduction

Article 15 of the OECD Model (2014) is the core provision in double taxation conventions for income from employment. Pursuant to article 15(1) of the OECD Model (2014), the residence state is entitled to tax income from employment unless the activity is exercised in another state. If the employment is exercised in another state – commonly referred to as the source state – article 15(1), second sentence, of the OECD Model (2014) stipulates that the state of exercise is entitled to tax. Whether the state of residence must exempt the income received from activities carried out in the source state or whether the tax on such activities must be credited depends on which method is prescribed in article 23 of the OECD Model (2014).

There are various special provisions that prevail over article 15(1) of the OECD Model and stipulate different legal consequences. One of these is the 183-day rule prescribed in article 15(2) of the OECD Model (2014), which attributes the taxing right back to the residence state. Also, article 15(3) of the OECD Model (2014) provides a special rule according t...