Article 3: General Definitions
United Nations Model Double Taxation Convention between Developed and Developing Countries (2017 Update)
Article 3
General Definitions
- For the purposes of this Convention, unless the context otherwise requires:
(a) The term "person" includes an individual, a company and any other body of persons;
(b) The term "company" means any body corporate or any entity that is treated as a body corporate for tax purposes;
(c) The terms "enterprise of a Contracting State" and "enterprise of the other Contracting State" mean respectively an enterprise carried on by a resident of a Contracting State and an enterprise carried on by a resident of the other Contracting State;
(d) The term “international traffic” means any transport by a ship or aircraft, except when the ship or aircraft is operated solely between places in a Contracting State and the enterprise that operates the ship or aircraft is not an enterprise of that State;
(e) The term "competent authority" means:
(i) (In State A): ...................................................................
(ii) (In State B): ...................................................................
(f) The term "national" means:
(i) Any individual possessing the nationality of a Contracting State
(ii) Any legal person, partnership or association deriving its status as such from the laws in force in a Contracting State.
2 As regards the application of the Convention at any time by a Contracting State, any term not defined therein shall, unless the context otherwise requires, have the meaning that it has at that time under the law of that State for the purposes of the taxes to which the Convention applies, any meaning under the applicable tax laws of that State prevailing over a meaning given to the term under other laws of that State.
OECD Model Tax Convention on Income and on Capital (2017 Update)
Article 3
General Definitions
For the purposes of this Convention, unless the context otherwise requires:
a) the term "person" includes an individual, a company and any other body of persons;
b) the term "company" means any body corporate or any entity that is treated as a body corporate for tax purposes;
c) the term "enterprise" applies to the carrying on of any business;
d) the terms "enterprise of a Contracting State" and "enterprise of the other Contracting State" mean respectively an enterprise carried on by a resident of a Contracting State and an enterprise carried on by a resident of the other Contracting State;
e) the term "international traffic" means any transport by a ship or aircraft except when the ship or aircraft is operated solely between places in the other Contracting State and the enterprise that operates the ship or aircraft is not an enterprise of that State;;
f) the term "competent authority" means:
(i) (in State A): . . . . . . . . . . . . . . .
(ii) (in State B): . . . . . . . . . . . . . . . .
g) the term "national", in relation to a Contracting State, means:
(i) any individual possessing the nationality or citizenship of that Contracting State; and
(ii) any legal person, partnership or association deriving its status as such from the laws in force in that Contracting State;
h) the term "business" includes the performance of professional services and of other activities of an independent character.
i) the term “recognised pension fund” of a State means an entity or arrangement established in that State that is treated as a separate person under the taxation laws of that State and:
(i) that is established and operated exclusively or almost exclusively to administer or provide retirement benefits and ancillary or incidental benefits to individuals and that is regulated as such by that State or one of its political subdivisions or local authorities; or
(ii) that is established and operated exclusively or almost exclusively to invest funds for the benefit of entities or arrangements referred to in subdivision (i).
2 As regards the application of the Convention at any time by a Contracting State, any term not defined therein shall, unless the context otherwise requires or the competent authorities agree to a different meaning pursuant to the provisions of Article 25, have the meaning that it has at that time under the law of that State for the purposes of the taxes to which the Convention applies, any meaning under the applicable tax laws of that State prevailing over a meaning given to the term under other laws of that State.
Article 3 Bibliography
Avery Jones, John F. “Article 3(2) of the OECD Model Convention and the Commentary to It: Treaty Interpretation” (1993) 33:8 Euro Tax 252
Avery Jones, John F et al. “The Origins of Concepts and Expressions Used in the OECD Model and Their Adoption by States” (2006) 60:6 Bull Intl Tax’n 220.
Baker, Philip. “United Kingdom: Michael Macklin v. Commissioners for Her Majesty’s Revenue and Customs” in Eric CCM Kemmeren et al, eds, Tax Treaty Case Law Around the Globe 2014 (Amsterdam: International Bureau of Fiscal Documentation, 2014) 31, online: <http://www.fieldtax.com/wp-content/uploads/2015/09/United-Kingdom-Michael-Macklin-v-Commissioners-for-Her-Majestys-Revenue-and-Customs.pdf>
Blàhovà, Renàta. “Slovak Regional Court on a Dutch Holding Without Sufficient Substance” in Michael Lang et al, eds, Tax Treaty Case Law Around the Globe 2013 (Vienna: Linde, 2014) 41 <https://www.ibfd.org/sites/ibfd.org/files/content/pdf/14_034_Tax_treaty_case_law_around_the_globe_2013_final_web_0.pdf>
Deák, Daniel. “Hungary: Does the Hungarian Local Trade Tax Fall within the Substantive Scope of a DTC?” in Michael Lang et al, eds, Tax Treaty Case Law Around the Globe 2011 (Alphen on the Rhine: Kluwer Law International, 2012) 43 <https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1969554>
Kandev, Michael. “Tax Treaty Interpretation: Determining Domestic Meaning Under Article 3(2) of the OECD Model”(2007) 55:1 Can Tax J 31, online: <https://www.ctf.ca/ctfweb/Documents/PDF/2007ctj/2007ctj1-kandev.pdf>
Leonardo F.M Castro, "Concept of Beneficial Owner in Tax Treaties: Separating the Wheat from the Chaff through Case Law Method Internationally" 39 Int'l Tax J. 21 (2013) https://perma.cc/GHQ4-BGN5
Li, Jinyan. “Beneficial Ownership in Tax Treaties: Judicial Interpretation and the Case for Clarity” (2012) Osgoode CLPE Research Paper No 4, online: <http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2000816>
S. Jain; J. Prebble, "OECD - Conceptual Problems of Beneficial Ownership and the Corporate Veil" (2019) 73:3 Bulletin for International Taxation https://www.ibfd.org/IBFD-Products/Journal-Articles/Bulletin-for-International-Taxation/collections/bit/html/bit_2019_03_o2_1.html
Article 3 Cases
Bundesfinanzhof [Federal Tax Court],FloridaLLC,2009, I R 34/08, 263 (Germany).
Fothergill v Monarch Airlines Ltd [1981] AC 251 (UK)
Hunter Douglas Ltd v R,[1979] CTC 424 (FCTD).
Inland Revenue Commissioners v Commerzbank AG [1990] STC 285, High Court of Justice of England and Wales (Chancery Division) (UK).
Karakochuk v The Queen, 2005 TCC 479
Regeringsratten (Supreme Administrative Court), RA 1996 ref 84 (6301-1994), 2 October 1996, Skattenytt, 1997 s 219 (Sweden).
Supreme Court of the Republic of Hungary, 2010, No Kvf.I.35.222/2008/5 (Hungary).