Abstract
This article discusses the ‘Discussion draft on a new Article 7 (Business Profits) of the OECD Model Convention’, dated 7 July 2008. The focus is on the first three paragraphs of Article 7 of the Model Convention (MC). Based upon this Draft, the term ‘profits of an enterprise’ of the first paragraph should be interpreted based upon the functional separate entity approach. Moreover, under the second paragraph the separate and independent enterprise fiction should be strictly applied. In line with this fiction, the Transfer Pricing Guidelines are now embedded in Article 7 of the MC. The current text of the third paragraph is completely deleted. The new text regards the attribution of ‘free’ capital to a permanent establishment.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
