A report by James R. Border, Law Office of James R Border P.A., Fort Lauderdale, Florida
On 22 October 2020 the United Nations Committee of Experts on International Tax Matters addressed several items relating to the UN Model Tax Convention. Among those was a discussion of the relationship between VAT/GST registration and the determination that an enterprise has a permanent establishment within a jurisdiction for income tax purposes.
The Committee retained commentary provisions that disassociate the two nexus standards affirming their differences, however, information acquired concerning the activities that create VAT/GST nexus may be relevant to the finding that an enterprise has a permanent establishment.
With respect to collective investment vehicles (CIVs), the committee discussed the classification of “recognized pension funds” as CIVs and noted a minority view that a recognized pension fund be “liable to tax” as a technical matter. The inclusion of software royalties under Article 12 of the model convention was discussed without resolution.
