What Has Changed in the Limitation on Benefits Clause of the 2016 US Model?: Technical Modifications, Policy Considerations and Comparisons with Base Erosion and Profit Shifting Action 6

• Autores: Rita Julien, Petra Koch, Rita Szudoczky
• Localización: Intertax, ISSN 0165-2826, Vol. 45, Nº. 1, 2017, págs. 12-37
• Idioma: inglés
• Texto completo no disponible (Saber más ...)
• Dialnet Métricas: 1 Cita
• Resumen

  • The Limitation on Benefits (LOB) clause of the US Model Income Tax Convention (US Model) has undergone significant changes in the latest version of the US Model published in February 2016. The aim of this article is to analyse the changes to the LOB clause in the 2016 US Model as compared to its predecessor in the previous 2006 US Model and the LOB clause recommended by the Action 6 Final Report of the OECD/G20 Base Erosion and Profit Shifting (BEPS) Project. The article first focuses on changes which simultaneously affect multiple tests, namely the changes to the ownership requirements and the changes to the base erosion requirements, which are found throughout the LOB. Second, the article examines two tests which made their way into the US Model for the first time, namely the derivative benefits test and the headquarters company test. It assesses what balance has been struck between the desire to open up and modernize the LOB clause, while maintaining its effectiveness in counteracting treaty shopping. Throughout its detailed study of these changes, it offers lessons that could be taken into account by the Organisation for Economic Co-operation and Development (OECD) in the finalization of its proposed LOB clause under Action 6 and by those states that choose to adopt a detailed LOB provision in their tax treaties in order to meet the minimum standard under Action 6.