The United Nations Handbook on selected issues in the administration of tax treaties was issued on 28 June 2013. This follows a technical meeting held in New York on 30 to 31 May by the Financing for Development office of the UN’s Department of Economic Affairs and the International Tax Compact (ITC).  At this meeting a series of draft papers on the administration and negotiation of tax treaties were presented and discussed. Developing counties are facing various challenges in the area of negotiation of tax treaties including a lack of resources and skills. The release of the UN Handbook is one element in assisting developing countries to train tax administrators and treaty negotiators.

The Handbook covers issues of importance to developing countries seeking to protect their tax base. The opening section covers issues and problems that may arise in the administration of tax treaties, including the interaction of treaties with domestic tax law and the question of who qualifies for benefits under the treaty. The handbook also looks at the taxation of foreign income of residents and the taxation of income of foreign enterprises.

Developing countries need to adequately tax foreign enterprises operating on their territory including the taxation of business profits and other income of non-residents. There is a section devoted to the taxation of non-resident service providers who are often more difficult to tax than enterprises providing goods. The handbook also covers the issues of dispute resolution and exchange of information provisions in tax treaties.

There is also a section on the improper use of tax treaties, tax avoidance and evasion written by the well-known tax expert Philip Baker.  This section covers issues of treaty shopping and the use of conduit companies and looks at methods of income shifting used by international enterprises.  The important issue of the taxation of employee secondments is also covered in the handbook.