Article 15: Dependent Personal Services/Income from Employment
United Nations Model Double Taxation Convention between Developed and Developing Countries (2017 Update)
Article 15
Dependent Personal Services
Subject to the provisions of articles 16, 18 and 19, salaries, wages and other similar remuneration derived by a resident of a Contracting State in respect of an employment shall be taxable only in that State unless the employment is exercised in the other Contracting State. If the employment is so exercised, such remuneration as is derived therefrom may be taxed in that other State.
Notwithstanding the provisions of paragraph 1, remuneration derived by a resident of a Contracting State in respect of an employment exercised in the other Contracting State shall be taxable only in the first-mentioned State if:
(a) The recipient is present in the other State for a period or periods not exceeding in the aggregate 183 days in any twelve-month period commencing or ending in the fiscal year concerned; and
(b) The remuneration is paid by, or on behalf of, an employer who is not a resident of the other State; and
(c) The remuneration is not borne by a permanent establishment or a fixed base which the employer has in the other State.
3 Notwithstanding the preceding provisions of this Article, remuneration derived by a resident of a Contracting State in respect of an employment, as a member of the regular complement of a ship or aircraft, that is exercised aboard a ship or aircraft operated in international traffic, other than aboard a ship or aircraft operated solely within the other Contracting State, shall be taxable only in the first-mentioned State.
OECD Model Tax Convention on Income and on Capital (2017 Update)
Article 15
Income From Employment
Subject to the provisions of Articles 16, 18 and 19, salaries, wages and other similar remuneration derived by a resident of a Contracting State in respect of an employment shall be taxable only in that State unless the employment is exercised in the other Contracting State. If the employment is so exercised, such remuneration as is derived therefrom may be taxed in that other State.
Notwithstanding the provisions of paragraph 1, remuneration derived by a resident of a Contracting State in respect of an employment exercised in the other Contracting State shall be taxable only in the first-mentioned State if:
a) the recipient is present in the other State for a period or periods not exceeding in the aggregate 183 days in any twelve month period commencing or ending in the fiscal year concerned, and
b) the remuneration is paid by, or on behalf of, an employer who is not a resident of the other State, and
c) the remuneration is not borne by a permanent establishment which the employer has in the other State.
3 Notwithstanding the preceding provisions of this Article, remuneration derived by a resident of a Contracting State in respect of an employment, as a member of the regular complement of a ship or aircraft, that is exercised aboard a ship or aircraft operated in international traffic, other than aboard a ship or aircraft operated solely within the other Contracting State, shall be taxable only in the first-mentioned State.
Article 15 Bibliography
Andreoni, Walter. “Update to the Commentary on Article 15 of the OECD Model: Thoughts on the Interpretation of the Term ‘employer’ for Treaty Purposes” in Dennis Weber & Stef van Weeghel, eds, The 2010 OECD Updates: Model Tax Convention & Transfer Pricing Guidelines: A Critical Review (Alphen on the Rhine: Kluwer Law International, 2011) 115 <https://lrus.wolterskluwer.com/store/product/the-2010-oecd-updates-model-tax-convention-and-transfer-pricing-guidelines-a-critical-review/>
Dagan, Tsilly & Yariv Brauner. “Israel: Relationship between the Employment Article and the Sportsmen Article” in Eric CCM Kemmeren et al, eds, Tax Treaty Case Law Around the Globe 2014 (Amsterdam: International Bureau of Fiscal Documentation, 2014) 253 <https://www.ibfd.org/IBFD-Products/Tax-Treaty-Case-Law-Around-Globe-2014>
De Broe, Luc. “Belgium: Employment Agreement for Purposes of Article 15 of the OECD Model” in Eric CCM Kemmeren et al, eds, Tax Treaty Case Law around the Globe 2012 (Vienna: Linde, 2013) 21 <https://www.ibfd.org/IBFD-Products/Tax-Treaty-Case-Law-around-Globe-2012>
Djigsa, Wakgari, Taxation of Income from Employment: A Comparative Study of the OECD Model Convention, the UN Model Convention, the Ethio-China Tax Treaty and the Ethio-UK Tax Treaty (July 14, 2016). Available at SSRN: https://ssrn.com/abstract=2809489 or http://dx.doi.org/10.2139/ssrn.2809489
Drake, Katharine D. and Goldman, Nathan and Murphy, Frank, Foreign Employment, Income Shifting, and Tax Uncertainty (January 17, 2019). University of Connecticut School of Business Research Paper No. 18-23. Available at SSRN: https://ssrn.com/abstract=3231948 or http://dx.doi.org/10.2139/ssrn.3231948
Dziurdź, Kasper. “Austria: The Meaning of the Term ‘Employer’ under Article 15(2)” in Eric CCM Kemmeren et al, eds, Tax Treaty Case Law Around the Globe 2014 (Amsterdam: International Bureau of Fiscal Documentation, 2014) 221 <https://www.ibfd.org/IBFD-Products/Tax-Treaty-Case-Law-Around-Globe-2014>
Garbarino, Carlo, Tax Aspect of the Mobility of Individuals and Companies within the EU (August 21, 2015). Tax Aspects of The Mobility of Individuals and Companies Within the EU, in Taxation and Migration (Joel Slemrod – Reuven Avvi Yonah editors); 2015. Available at SSRN: https://perma.cc/6EUX-ZWBD
Hammer, Richard M. “OECD Proposes Restrictions on Article 15 Regarding Income from Employment” (2005) 33:10 Tax Mgmt Intl J 583.
Hansen, Søren Friis. “Denmark: The Definition of a ‘Hired Worker’ in Article 14 Denmark Netherlands DTC” in Michael Lang et al, eds, Tax Treaty Case Law Around the Globe 2011 (Alphen on the Rhine: Kluwer Law International, 2012) 323 <https://www.lindeverlag.at/buch/tax-treaty-case-law-around-the-globe-2011-4419>
Helminen, Marjaana. “Finland: Taxing Rights on Employee Stock Options under Tax Treaties and the Relevance of the OECD Model Commentary” in Eric CCM Kemmeren et al, eds, Tax Treaty Case Law Around the Globe 2014 (Amsterdam: International Bureau of Fiscal Documentation, 2014) 239 <https://www.ibfd.org/IBFD-Products/Tax-Treaty-Case-Law-Around-Globe-2014>
Jiménez, Adolfo Martín. “Spain: Article 15 OECD Model Convention, Stock Options and Inpatriate Tax Regimes: Judgment of ‘Tribunal Superior de Justicia’ of Madrid of 12 March 2014” in Michael Lang et al, eds, Tax Treaty Case Law Around the Globe 2015 (Vienna: Linde, 2016) 245 <https://www.ibfd.org/IBFD-Products/Tax-Treaty-Case-Law-around-Globe-2015>
Kirsch, Michael S., The Role of Physical Presence in the Taxation of Cross-Border Personal Services (2010). Boston College Law Review, Vol. 51; Notre Dame Legal Studies Paper No. 09-47. Available at SSRN: https://perma.cc/8PTL-X87Z
Martin, Philippe. “France: The Paupardin Case” in Michael Lang et al, eds, Tax Treaty Case Law Around the Globe 2013 (Vienna: Linde, 2014) 261 <https://www.ibfd.org/IBFD-Products/Tax-Treaty-Case-Law-Around-Globe-2013>
Navot, Yuval. “Taxation of Compensatory Stock Options Under Tax Treaties” (2010) Tax Notes 325, online: <http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1545204>
Pötgens, Frank PG. “Some Selected Interpretation and Qualification Issues with Respect to Article 15(2)(b) and (c) of the OECD Model” in Dennis Weber & Stef van Weeghel, eds, The 2010 OECD Updates: Model Tax Convention & Transfer Pricing Guidelines: A Critical Review (Alphen on the Rhine: Kluwer Law International, 2011) 125, online: <http://www.belastingrechtaandevu.nl/Portals/0/images/Potgens_artikel36.pdf>
Rust, Alexander. “Germany: Interpreting the 183-Day Rule” in Michael Lang et al, eds, Tax Treaty Case Law Around the Globe 2013 (Vienna: Linde, 2014) 269 <https://www.ibfd.org/IBFD-Products/Tax-Treaty-Case-Law-Around-Globe-2013>
Vinnitskiy, Danil V. “Russia: Withholding Tax on Agency Fees under the Russia-Germany Tax Treaty (Articles 14, 15 and 21)” in Michael Lang et al, eds, Tax Treaty Case Law Around the Globe 2015 (Vienna: Linde, 2016) 257 <https://www.ibfd.org/IBFD-Products/Tax-Treaty-Case-Law-around-Globe-2015>
Waldburger, Robert. “Income from Employment (Article 15 OECD Model Convention)” in Michael Lang et al, eds, Source Versus Residence: Problems Arising from the Allocation of Taxing Rights in Tax Treaty Law and Possible Alternatives (Austin: Wolters Kluwer Law & Business, 2008) 185 <https://lrus.wolterskluwer.com/store/product/source-versus-residence-problems-arising-from-the-allocation-of-taxing-rights-in-tax-treaty-law-and-possible-alternatives/>
Article 15 Cases
Andrew Ronald Macdonald-Hardie v the First Investigation Branch of Guangzhou Municipal Local Tax Bureau, (2014) huihongfaxingzhongzi no 1464 (China).
Bulgarian work agency v National Revenue Agency, Supreme Administrative Court No 11595, November 1st 2016 (Bulgaria).
Bundesfinanzhof (Federal Fiscal Court), I I B 186/93, 16 March 1994, Bundessteuerblatt, 1994, II, 696 (Germany).
Bundesfinanzhof (Federal Fiscal Court), I R 15/09, 11 November 2009, Bundessteuerblatt, II, 2010, 602 (Germany).
Bundesfinanzhof (Federal Fiscal Court), I R 67/83, 22 June 1983, Bundessteuerblatt, 1983, II, 18, 625 (Germany).
Bundesfinanzhof (Federal Fiscal Court), I R 84/08, 11 November 2009, Bundessteuerblatt, II, 2010, 390 (Germany).
Conseil d’Etat [Supreme Administrative Court], 16 April 2012, (2012) Revue de Jurisprudence Fiscale, No 323592 (France) (the Paupardin case).
Charles E Shultz v Her Majesty the Queen, 15 October 1996, 97 DTC 836.
Chung Gu v. MNR, [1991] 2 CTC 1093
Cour administrative No 37634C (Luxembourg).
Court of Appeals Antwerp, 21 June 2011, No TFR 2011/62 (Belgium).
Edwards v Canada, 2003 FCA 378, aff’g [2002] 4 CTC 2202.
Federal Commercial Court of the North-West District, 3 February 2014, No A56-20669/2013 (Russia).
Garcia v The Queen, 2007 TCC 548.
Hale v R, [1990] 2 CTC 247 (FCTD).
Hinkley v Minister of National Revenue, [1991] 2 CTC 2778 (TCC).
Hoge Raad der Nederlanden (The Netherlands Supreme Court), 37.651, 5 September 2003, Beslissingen in Belastingzaken, 2003/379 mn P Kavelaars (Netherlands).
Hoge Raad 18-11-2016 nos 15/04977, 15/04980, 15/04982, BNB 2017/34 (Netherlands).
Hojesteret (Supreme Court), 257/2010 / SKM 2012.462 H, 17 April 2012 (Denmark).
Ian M Maclean v Commissioner of Internal Revenue, 12 March 1980, 73 TC 1045 (United States).
Korkein Hallinto-Oikeus [Supreme Administrative Court of Finland], 16 May 2013,No 2013/1704 (93) (Finland).
M F Fowler v HMRC, [2016] UKFTT 234 (United Kingdom).
MNR v Stickel, [1975] 2 SCR 233.
Nightingale v The Queen, 2010 TCC 1.
Prescott (T) v Canada, [1995] 2 CTC 2068 (TCC).
Rechtbank Den Haag (District Court Den Haag), 08/5750, 25 March 2010, Vakstudie Nieuws, N 2010/37.11 (Netherlands).
Sanchez v The Queen, 2000 DTC 2151 (TCC).
Shihadeh vMNR, [1975] CTC 2116 (TRB).
Smith v MNR, [1970] Tax ABC 938.
Supreme Administrative Court, 22 May 2013, No 2009/13/0031 (Austria).
Sutcliffe v The Queen, 2005 TCC 812.
Tel Aviv District Court, 16 December 2012, Amutat Maccabi Rishon Le’tzion v The Assessment Officer, Nos 1051/04, 1061/05 (Israel).
The Queen v Hunt, [1977] CTC 578 (FCTD).
Tomislav Kljun v Commissioners for Her Majesty’s Revenue and Customs, 3 June 2011, [2011] UKFTT 371 (TC) (United Kingdom).
Tribunal Superior de Justicia de Madrid [Superior Court of Justice], 12 March 2014, No 1100/2011 (Spain).
Vestre Landsret [Western High Court], 31 August 2010, No SKM2010.626VLR (Denmark).
Wise v Commissioner of Inland Revenue, M200/87, 7 February 1992, (1992) 14 NZTC 9,032 (New Zealand).
Wolf v The Queen,[2000] 1 CTC 2172 (TCC).
Wyatt v MNR, [1975] CTC 2055 (TRB).