An analysis of article 18 OECD model convention and the interaction between EET and TEE states

Abstract

This Term Paper aims to critically analyze Article 18 OECD MC and its components that deal with the cross boarder taxation of pensions, as well as outlining the different domestic systems of taxation of pension benefits and issues of double taxation and double-non taxation. Chapter 1 will focus on dissecting the elements contained in Article 18 OECD MC dealing with private pensions and provide an analytical focus on the elements to this provision. Chapter 1 will enable the reader to grasp a comprehensive understanding on what is encompassed by the elements contained in Article 18 OECD MC by referring to case law and authoritative sources. Chapter 2 will direct particular attention to Article 19 (2) (a) OECD MC dealing with governmental service pensions and the differentiation in the allocation of taxing rights to the paying state rather than the residence state as is provided in Article 18 OECD MC. Chapter 3 will shed light on the transferability of pension rights from a public to a private scheme or vice versa and the impact on the taxation created by such transferability. Chapter 4 outlines different domestic systems of taxation in relation to pensions and briefly focuses on the workings of such systems. The Author, in Chapter 5 shall delve into issues of double taxation, double non-taxation and the problems created by mismatches in domestic systems of taxation. The Author shall outline alternative provisions that may be adopted in order to mitigate double taxation and avoid fiscal evasion. Chapter 5 shall be followed by a conclusion, where the Author will outline how a person can access a Treaty based on the OECD MC in order to seek relief from juridical double taxation. The Author will also provide insight to the future of the OECD MC and the fight against fiscal evasion.