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Model Tax Convention: interest deductions

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The OECD has launched a consultation on proposed changes to the OECD Model Tax Convention commentary that acknowledges countries’ right to restrict interest deductibility through domestic law while affirming the importance of access to mutual agreement procedures (Article 9).

OECD working parties have recently undertaken work on the Commentary on Article 9 to clarify its application, especially as it relates to domestic laws on interest deductibility, such as those recommended in the final report on BEPS Action 4, as some commentators have questioned the interaction of Article 9 with those rules. This work is closely linked to the report Transfer Pricing Guidance on Financial Transactions published on 11 February 2020. The consultation closes on 28 May 2021.

Issue: 1526
Categories: News