On 19 October 2012 the OECD released a discussion draft on tax treaty issues relating to emissions permits and credits. Comments from interested parties were invited by 15 January 2013 and these comments have now been published on the OECD website.
The revised discussion draft broadened the scope of the discussion of emissions permits and credits to include Certified Emission Reduction (CER) credits And Emission Reduction Units (ERUs). The draft covered treaty issues relating both to the issuance of and trading in emissions permits, CERs and ERUs.
The proposed change to the commentary to Article 7 would confirm that issues relating to the issuance or trading of emissions permits is generally covered by Article 7 (business profits) or Article 13 (capital gains) of a tax treaty, although in certain circumstances it might fall within the scope of Article 6 (income from immovable property), Article 8 (shipping, inland waterways transport and air transport) or Article 21 (other income).
Comments have been received from six interested parties and these are available on the OECD website. The comments are to be considered by Working Party 1 of the OECD’s Committee of Fiscal Affairs at its February 2013 meeting.
