Low-Income Countries Get Treaty-Based Minimum Tax Rule (2)

The OECD on Monday released a model treaty provision for the global tax deal’s treaty-based rule for developing countries.

The rule, known as the subject-to-tax rule, is meant to help low-income countries collect more tax under treaties that set low withholding rates.

The model treaty provision provided more information to the public on key definitions, computational guidelines, the scope of the rule, and double taxation.

“By restoring taxing rights to the source State in these cases, the STTR is designed to help developing countries– notably those with lower administrative capacities – to protect their tax base,” the executive summary of ...