USCIB’s tax expert Carol Doran Klein attended meetings at the UN related to tax policy earlier this month along with USCIB’s Tax Committee Chair Bill Sample. A major outcome of the meeting was the launch of the 2017 version of the UN Transfer Pricing Manual at the UN’s Economic and Social Council. The manual is almost 700 pages and is intended to be consistent with the OECD Transfer Pricing Guidelines. It also includes country practices for Brazil, China, India, Mexico, and South Africa. The UN Committee of Tax Experts also approved a handbook on extractive industries, including a section on transfer pricing.
The Committee also approved final changes to its model income tax treaty and commentaries. The 2017 version of the model will likely be released in October at the next meeting of the Committee of Tax Experts in Geneva, Switzerland. The new model will adopt many of OECD’s base erosion and profit shifting treaty provisions including a new article on entitlement to benefits and modifications to the permanent establishment rules. The new model will also include a controversial new article on taxation of fees for technical services.
“This article, if adopted in a bilateral income tax treaty, would permit the country where technical services are consumed to impose a tax on those services regardless of where the services are performed or whether the person performing the services had any presence in the country of consumption of the services,” said Doran Klein.
Members from countries that export services objected strongly to the inclusion of this new Article in the model.