Tuesday, February 12, 2013

New report on African tax treaties: UN versus OECD models

Fresh from writing our blog looking at a major (and, for once, welcome) new OECD report on the taxation of multinational corporations, we now have news of a new report from the European University Institute, Florence, entitled Choosing between the UN and OECD Tax Policy Models: an African Case Study (hat tip: Markus Meinzer/Katrin Mc Gauren/Florian van Megen.)

It contains many things of interest, but we choose to select the abstract in its entirety:
"Almost all the world's tax treaties are based on precedents found in an OECD model tax convention or a UN model tax convention. Both model divide taxing rights on cross-border investment and business activities. The OECD model shifts taxing rights to capital exporting treaty partners while the UN treaty allows capital importing countries to retain more taxing rights. This paper examines the use of OECD and UN precedents in the tax treaties of a group of 11 East African countries. It is difficult to see a link between reduced taxation by the capital importing countries and increased foreign investment. While there are variations within the group, as a group the African countries may have conceded more taxing rights to capital exporting nations than counterparts in Asia."
Our highlights added. We will store this permanently on our Tax Treaties webpage.


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