Conventions fiscales

OECD releases draft revised Commentary on Article 7 of the OECD Model Tax Convention


10 April 2007

The OECD Committee on Fiscal Affairs has released as a discussion draft a revised Commentary on Article 7 that takes account of many of the conclusions included in  Parts I, II and III of its Report on the Attribution of Profits to Permanent Establishments.

New versions of these three Parts, along with a cover note containing an update on the status of that project, were released in December 2006. As indicated in that cover note

In order to provide maximum certainty on how profits should be attributed to permanent establishments, the Committee has decided that the Report’s conclusions should be reflected in a new version of Article 7, together with accompanying Commentary, to be used in the negotiation of future treaties and of amendments to existing treaties. In addition, in order to provide improved certainty for the interpretation of existing treaties based on the current text of Article 7, the Committee has decided that revised Commentary for that current text should also be prepared, to take into account those aspects of the Report that do not conflict with the existing Commentary.

The note also indicated that the Committee intended to release both parts of that implementation package in draft form for public comment during 2007.

The revised Commentary now being released has been prepared in accordance with these decisions. It seeks to take account of those aspects of the Report on the Attribution of Profits to Permanent Establishments that do not conflict with the existing interpretation of Article 7 reflected in the current version of the Commentary. An Annex to the discussion draft includes a marked-up version that highlights all the changes made to the existing Commentary.

It is expected that the second part of the implementation package (i.e. a new version of Article 7 with accompanying new Commentary) will be released as a discussion draft towards the end of the year.
Interested parties are invited to send their comments on the discussion draft if possible before 15 June 2007 so that they may be examined at the next meeting of the sub-group mandated to draft the implementation package (that meeting will take place on 25-27 June). Comments sent after that date but before 1 August 2007 will also been examined, but at a later meeting. Comments should be sent to:

Jeffrey Owens
Director, CTPA
2, rue André Pascal
75775 Paris

e-mail: jeffrey.owens@oecd.orgUnless otherwise requested at the time of submission, comments submitted to the OECD in response to this invitation may be posted on the OECD website.

For further information, please contact Jacques Sasseville (


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