Article 2: Taxes Covered
Learning Objectives: You Should:
- Be able to understand the scope of the UN and OECD Model Tax Conventions
United Nations Model Double Taxation Convention between Developed and Developing Countries (2017 Update)
Article 2
Taxes Covered
This Convention shall apply to taxes on income and on capital imposed on behalf of a Contracting State or of its political subdivisions or local authorities, irrespective of the manner in which they are levied.
There shall be regarded as taxes on income and on capital all taxes imposed on total income, on total capital, or on elements of income or of capital, including taxes on gains from the alienation of movable or immovable property, taxes on the total amounts of wages or salaries paid by enterprises, as well as taxes on capital appreciation.
The existing taxes to which the Convention shall apply are in particular:
(a) (in State A): .............................................................................
(b) (in State B): .............................................................................
4 The Convention shall apply also to any identical or substantially similar taxes which are imposed after the date of signature of the Convention in addition to, or in place of, the existing taxes. The competent authorities of the Contracting States shall notify each other of significant changes made to their tax law.
OECD Model Tax Convention on Income and on Capital (2017 Update)
Article 2
Taxes Covered
This Convention shall apply to taxes on income and on capital imposed on behalf of a Contracting State or of its political subdivisions or local authorities, irrespective of the manner in which they are levied.
There shall be regarded as taxes on income and on capital all taxes imposed on total income, on total capital, or on elements of income or of capital, including taxes on gains from the alienation of movable or immovable property, taxes on the total amounts of wages or salaries paid by enterprises, as well as taxes on capital appreciation.
The existing taxes to which the Convention shall apply are in particular:
a) (in State A): . . . . . . . . . . . . . . . . . .
b) (in State B): . . . . . . . . . . . . . . . . . .
4 The Convention shall apply also to any identical or substantially similar taxes that are imposed after the date of signature of the Convention in addition to, or in place of, the existing taxes. The competent authorities of the Contracting States shall notify each other of any significant changes that have been made in their taxation laws.
Article 2 Bibliography
Easson, Alexander J.. "The Evolution of Canada's Tax Treaty Policy Since the Royal Commission on Taxation." Osgoode Hall Law Journal 26.3 (1988) : 495-536. https://digitalcommons.osgoode.yorku.ca/cgi/viewcontent.cgi?referer=https://www.google.com/&httpsredir=1&article=1811&context=ohlj
David A. Ward, "The Role of the Commentaries on the OECD Model in the Tax Treaty Interpretation Process" (2006) 60:3 Bulletin for International Taxation 97.
Helminen, Marjaana. “Finland: Is the Estonian Corporate Tax Covered by Article 2 and Creditable under Article 23?” in Michael Lang et al, eds, Tax Treaty Case Law Around the Globe 2015 (Vienna: Linde, 2016) 25 <https://www.ibfd.org/IBFD-Products/Tax-Treaty-Case-Law-around-Globe-2015>
Kasaizi, Abeid. “Interpretation of the Material Scope of Taxes Covered by the OECD-MC (Art 2 OECD-MC)” in Michael Schilcher & Patrick Weninger, eds, Fundamental Issues and Practical Problems in Tax Treaty Interpretation (Vienna: Linde, 2008) 351 <https://www.lindeverlag.at/buch/fundamental-issues-and-practical-problems-in-tax-treaty-interpretation-3253>
Klaus Vogel, Double Tax Treaties and Their Interpretation, 4 Int'l Tax & Bus. Law. 1 (1986). https://scholarship.law.berkeley.edu/cgi/viewcontent.cgi?article=1039&context=bjil
Klaus Vogel, "The Influence of the OECD Commentaries on Treaty Interpretation" (2000) 54:12 Bulletin for International Taxation 612.
L. Friedlander & Scott Wilkie, "Policy Forum: The History of Tax Treaty Provisions - And Why It Is Important to Know About It" (2006) Canadian Tax Journal 54:4 907. https://www.ctf.ca/ctfweb/Documents/PDF/2006ctj/06ctj4_friedlander.pdf
Lang, Michael. “‘Taxes Covered’: What is a ‘Tax’ According to Article 2 of the OECD Model?” (2005) 59:6 Bull Intl Tax’n 216 <https://www.ibfd.org/IBFD-Products/Journal-Articles/Bulletin-for-International-Taxation/collections/bit/pdf/bifd060502.pdf>
Marwah Rizqy, "History of Tax Treaties" in Jean-Pierre Vidal ed. Introduction to International Tax in Canada 3rd ed. (Toronto, Canada: Thompson Reuters Canada Limited, 2015).
Michael Lang & Florian Brugger, "The Role of the OECD Commentary in Tax Treaty Interpretation" (2008) 23 Australian Tax Forum 95. https://www.wu.ac.at/fileadmin/wu/d/i/taxlaw/institute/staff/publications/langbrugger_australiantaxforum_95ff.pdf
Monica Erasmus-Koen & Sjoerd Douma, "Legal Status of the OECD Commentaries - In Search of the Holy Grail of International Tax Law" (2007) 61:8 Bulletin for International Taxation 339.
Perrou, Katerina. “Greece: ‘Taxes Covered’ – Is an Extraordinary Levy on Business Profits Covered?” in Michael Lang et al, eds, Tax Treaty Case Law Around the Globe 2013 (Vienna: Linde, 2014) 13 <https://www.ibfd.org/sites/ibfd.org/files/content/pdf/14_034_Tax_treaty_case_law_around_the_globe_2013_final_web.pdf>
Vesrtraeten, Axel. “Argentina: Petrobras Case: Is Argentinian Minimum Presumed Income Tax Covered in Tax Treaties?” in Michael Lang et al, eds, Tax Treaty Case Law Around the Globe 2015 (Vienna: Linde, 2016) 19. <https://www.ibfd.org/IBFD-Products/Tax-Treaty-Case-Law-around-Globe-2015>
Article 2 Cases
Administrative Court of Appeals of Athens, 481/2012, 7 February 2012, European Tort Law Yearbook, 3, 1, 273 (Greece).
Bundesfinanzhof (Federal Fiscal Court), I R 64/13, IStR 2016, 770 (Germany).
Commercial Court for Moscow Circuit (Supreme Commercial Court), A40-1164/11-99-7, 20 February 2012, FNS Letter # GD-4-3/4566 (Russia).
Conseil d’État (Supreme Administrative Court), 249801, 15 July 2004, Revue de jurisprudence fiscal, 11/2004, 1089 (France).
Conseil d’État (Supreme Administrative Court), 93187, 26 November 1975, Droit fiscal, 1976, 733 (France).
Corte Suprema di Cassazione (Supreme Court), 18957, 20 November 2003 (Italy).
Entergy Corporation & Affiliated Subsidiaries v Commissioner of Internal Revenue, 9 September 2010, TC Memo 2010-197 (United States).
Finanzgericht Nordrhein-Westfalen (Tax Court Nordrhein-Westfalen), 2 k 4034/05, 20 April 2007, Internationales Steuerrecht 2007, 444. (Germany).
Hoge Raad der Nederlanden (Supreme Court), 42.211, 1 December 2006, Beslissingen in Belastingzaken, 2007, 68 (Netherlands).
Kinsella_ v _Revenue Commissioners [2007] IEHC 250, High Court (Ireland).
National Tax Court, 14 February 2014, Petrobas Energia Internacional SA (Argentina).
Niemeijer v. The Queen, 2009 TCC 624
Not disclosed at Taxation Review Authority v Commissioner of Inland Revenue, 18 January 1990, (1990) 12 NZTC 2,134 (New Zealand).
Østre Landsret (High Court of Eastern Denmark), 300/1989, 5 May 1992, Tidsskrift for Skatteret, 1992, 291 (Denmark).
Petrobas Energia Internacional SA, National Tax Court (Panel A), 2014 (Argentina).
PPL Corporation and Subsidiaries v the Commissioner of Internal Revenue,20 May 2013, 2013-1 USTC (CCH) 50335 (United States).
Tribunal Administratif (Administrative Tribunal) 18793/19298, 11 July 2005 (Luxembourg).
Tribunal de Grande Instance Paris (Grand Instance Court Paris), 1985-01-17, 17 January 1985, Revue de Jurisprudence Fiscale 1985, 3, 267 (France).
Tribunal de Premiere Instance Bruxelles (Court of First Instance Bruxelles), 2006/2662/A, 2 August 2011, TFR, 2012, liv 430, 935 (Belgium).
Undershaft Ltd v Commissioner of Taxation, 3 February 2009, [2009] FCA 41 (Australia).
Verwaltungsgerichtshof (Supreme Administrative Court), 98/13/0021, 15 December 1999 (Austria).
Verwaltungsgerichtshof (Supreme Administrative Court), 2000/13/0134, 28 March 2001 (Austria).
Verwaltungsgerichty Bern (Administrative Court Bern), 1996-08-30, 30 August 1996, Steuerentscheid, 1997, A 31.1, 5 (Switzerland).
Virgin Holdings SA v Federal Commissioner of Taxation, 10 October 2008, [2008] FCA 1503 (Australia).