It is timely that much of this briefing refers to treaty trends influenced by BEPS. For example hybrid entities including partnerships may fail to access treaty benefits in the absence of specific treaty coverage. The problem will be ameliorated if treaties are negotiated on the lines of US Model Treaty article 1.6 as suggested by BEPS Action 2. BEPS Action 6 is already having an influence on the terms of some new treaties. BEPS Action 7 has been reflected in a Japanese decision relating to an online business delivery warehouse. Interest dividends and royalties will be taxable at full corporate rates rather than reduced withholding if effectively connected to a foreign PE. Broadly speaking this will depend upon whether the assets producing the income are functionally managed by the PE. Following the Anson decision HMRC has reserved its position in stating...
