On July 11, 2017 the OECD  Committee on Fiscal Affairs released the draft contents of the 2017 update to the OECD Model Tax Convention, which were prepared by the Committee's Working Party 1, for comments. The update has not yet been approved by the Committee on Fiscal Affairs or by the OECD Council, although significant parts of the 2017 update were previously approved as part of the BEPS Package.  According to the OECD the 2017 update will be submitted for the approval of the Committee on Fiscal Affairs and of the OECD Council later in 2017.

Comments should be sent electronically in Word format by August 10, 2017 to This email address is being protected from spambots. You need JavaScript enabled to view it.. Comments should be addressed to the Tax Treaties, Transfer Pricing and Financial Transactions Division, OECD/CTPA.


At this time the OECD is only requesting comments with respect to certain parts of the 2017 update that have not previously been released for comments. These changes are as follows:

·   Changes to paragraph 13 of the Commentary on Article 4 related to the issue whether a house rented to an unrelated person can be considered to be a “permanent home available to” the landlord for purposes of the tie-breaker rule in Article 4(2) a).

·   Changes to paragraphs 17 and 19 of, and the addition of new paragraph 19.1 to, the Commentary on Article 4. These changes are intended to clarify the meaning of “habitual abode” in the tie-breaker rule in Article 4(2) c).

·   The addition of new paragraph 1.1 to the Commentary on Article 5. That paragraph indicates that registration for the purposes of a value added tax or goods and services tax is, by itself, irrelevant for the purposes of the application and interpretation of the permanent establishment definition.

·   Deletion of the parenthetical reference “(other than a partnership)” from subparagraph 2 a) of Article 10, which is intended to ensure that the reduced rate of source taxation on dividends provided by that subparagraph is applicable in the case where new Article 1(2) would have the effect that a dividend paid to a transparent entity would be considered to be income of a resident of a Contracting State because it is taxed either in the hands of the entity or in the hands of the members of that entity. That deletion is accompanied by new paragraphs 11 and 11.1 of the Commentary on Article 10.


The OECD explicitly states that comments are not requested with respect to changes to the OECD Model Tax Convention that have been approved as part of the BEPS Package, were foreseen as part of the follow-up work on the treaty-related BEPS measures and/or were previously released for comments. These changes — which are released for information — include the following:

·   Changes contained in the Report on Action 2 (Neutralising the Effects of Hybrid Mismatch Arrangements), the Report on Action 6 (Preventing the Granting of Treaty Benefits in Inappropriate Circumstances), the Report on Action 7 (Preventing the Artificial Avoidance of Permanent Establishment Status) and the Report on Action 14 (Making Dispute Resolution Procedures More Effective), as well as changes developed in the follow-up work on those Actions.

·   Changes to the Commentary on Article 5 integrating the changes resulting from the work on BEPS Action 7 with previous work on the interpretation and application of Article 5. The proposals that resulted from that earlier work – which was based on the pre-2017 update version of Article 5 – were originally published in an October 2011 discussion draft, discussed at a 7 September 2012 public consultation and subsequently released in a revised October 2012 discussion draft.

·   Changes to Article 8, related changes to subparagraph 1 e) of Article 3 (the definition of “international traffic”) and paragraph 3 of Article 15 (concerning the taxation of the crews of ships and aircraft operated in international traffic), and consequential changes to Articles 6, 13 and 22. These changes also include related Commentary changes. These proposed changes were released in a November 2013 discussion draft.

·   Changes to paragraph 5 of Article 25, related Commentary changes and amendments to the “Sample Mutual Agreement on Arbitration” contained in an Annex to that Commentary. These changes are intended to reflect the MAP arbitration provision developed in the negotiation of the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (the Multilateral Instrument or "MLI”) adopted on 24 November 2016.

·   Consequential changes required as a result of the contents of the 2017 update described above.


Click here to be forwarded to the the draft contents of the 2017 update to the OECD Model Tax Convention as released by the OECD on July 11, 2017.


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