The UN committee of Experts on International Cooperation in Tax Matters is meeting for its twelfth session in Geneva from 11 to 14 October 2016. The meeting is due to discuss issues connected to updating the UN Model Tax Convention and other matters including capacity building.

UN Model Tax Convention

Issues that may be discussed in relation to the UN Model include possible amendments to the commentary on Article 12 (Royalties) concerning industrial, commercial or scientific equipment and software-related payments. In relation to the taxation of services the Committee is considering amendments to the commentary in relation to technical services and is looking at a proposed Article 12 alternative.

Also on the agenda is consideration of the meaning and coverage of the term “profits from the operation of ships or aircraft in international traffic” for the purposes of Article 8 (Shipping, Inland Waterways Transport and Air Transport) of the UN Model.

In relation to Article 26 (Exchange of Information) the Committee is considering a proposed Code of Conduct. There is also a need to consider the implications for the treaty of the current international effort to combat base erosion and profit shifting.

Other issues

The agenda for the meeting also includes discussion of taxation of extractive industries; dispute resolution and the mutual agreement procedure; and an update to the UN Practical Manual on Transfer Pricing. The important issue of capacity building for developing country tax administrations is to be discussed and the taxation of development projects will also be covered.

A presentation on the issue of tax incentives is to be given to the tax experts. The need to efficiently target tax incentives has been highlighted in recent years as the granting of tax incentives that do not achieve their purpose may lead to an unnecessary reduction in tax revenue for developing countries.