On 19 to 28 April 2021 the twenty-second session of the UN Committee of Experts on International Cooperation in Tax Matters will be held in a series of virtual meetings.
UN Model Treaty – Revised Royalty definition
The Committee will consider the responses to the consultation on the inclusion of computer software payments in the definition of royalties in Article 12 of the UN Model Treaty. A discussion draft on this issue was released on 16 February 2021 inviting comments by 16 March 2021. Comments have now been received from a number of interested parties including the US Council for International Business (USCIB), the International Chamber of Commerce (ICC), the International Tax and Investment Center (ITIC), the Information Technology Industry Council (ITI), the Silicon Valley Tax Directors’ Group (SVTDG), and the BEPS Monitoring Group.
UN Model Treaty – Article 12B
The Committee will be invited to approve the final draft of Article 12B of the UN Model, relating to the right of a source country to impose a withholding tax up to 30% on deemed net income from certain automated digital services. The Article would cover services provided through the internet or electronic networks where there is minimal human involvement by the provider of the service. The Article would allow countries that have enacted a digital service tax in their domestic law to retain their taxing rights in the treaty. Countries that have not yet enacted a digital service tax could use the Article and commentary as a model for drafting domestic legislation.
Environmental Taxation
The Subcommittee on Environmental Taxation will present to the Committee its work on the Handbook on Carbon Taxation for Developing Countries. This includes revised chapters in relation to generating public acceptability for carbon taxes; international maritime transport; revenue use; and interaction of carbon taxation with other instruments.
Dispute Avoidance and Resolution
The Committee will be asked to approve a Preface and Chapter One for the Handbook on Dispute Resolution and Avoidance.
Transfer Pricing
The Committee are scheduled to discuss the update of the UN Practical Manual on Transfer Pricing for Developing Countries. The updated Manual is to include a new chapter dealing with financial transactions.
Extractive Industries
The Committee will discuss the updating of the Handbook on Selected Issues for Taxation of the Extractive Industries by Developing Countries, including new and updated sections.
Other
The Committee’s discussions will also cover capacity building and the role of tax in achieving the Sustainable Development Goals (SDGs).
ECOSOC Special Meeting
The meeting will be followed on 29 April 2021 by an ECOSOC Special Meeting looking at how tax policy and administration can play a part in responding to the social, economic and environmental changes brought about by the increasingly digitalised business environment and the consequences of the pandemic. The meeting will look at taxation in relation to inequality; environmental taxation; and the role of taxation in financing health systems. The discussions are taking place in the context of the Decade of Action to deliver the SDGs.
