The relevance of the OECD and UN Models and their Commentaries for the interpretation of the tax treaties

Abstract

This chapter aims to provide a comprehensive overview of the degree of consistency of the treaties to avoid double taxation concluded by Italy with the OECD Model Tax Convention on Income and Capital and the United Nations Model Double Taxation Convention between Developed and Developing Countries (respectively the OECD Model and the UN Model). It is worth pointing out from the very outset that all the treaties are generally modelled on the OECD Model but also that the treaties are, in large part, consistent with both Models, due to the similarity between the OECD Model and the UN Model. However, as will be shown in this chapter, there are cases in which all or some of the treaties comply with the UN Model but not with the OECD Model. In some cases, these variations are due to several relatively recent modifications of the OECD Model. Indeed, modifications to the OECD Model over recent years have reduced the degree of consistency between the OECD Model and the treaties, which have not been modified accordingly. In most other cases, all or some of the treaties comply only with the UN Model due to a choice made by Italy to adopt clauses that are divergent from the OECD Model. The analysis of the points of convergence and divergence from the Models will adhere to the numerical listing of the different articles of Italy’s treaties. Therefore, in respect of each clause, this chapter indicates convergence or divergence, with the result that such a schematic structure should clarify which of the clauses included in the Models can be considered as ‘standard clauses’ of the treaties. The term ‘standard clause’ will be italicized when it can be inferred that a clause of the Models has been adopted by Italy in the vast majority of its treaties, thereby constituting a kind of deliberate policy choice.