December 2009

The OECD Committee on Fiscal Affairs has released as a discussion draft a Report on “The Granting of Treaty Benefits with respect to the Income of Collective Investment Vehicles”(PDF) which contains proposed changes to the Commentary on the OECD Model Tax Convention dealing with the question of the extent to which either collective investment vehicles (CIVs) or their investors are entitled to treaty benefits on income received by the CIVs.  The Report is a modified version of the Report “Granting of Treaty Benefits with respect to the Income of Collective Investment Vehicles” (PDF) of the Informal Consultative Group on the Taxation of Collective Investment Vehicles and Procedures for Tax Relief for Cross-Border Investors (“ICG”) which was released on 12 January 2009. In that original Report, the ICG addressed the legal and policy issues specific to CIVs and formulated a comprehensive set of recommendations addressing the issues presented by CIVs in the cross-border context.Continue Reading OECD Releases Report on Granting of Treaty Benefits with Respect To The Income of Collective Investment Vehicles

Participation exemption rules do not apply to gains from sale of stock of passive intellectual property holding companies. For the exemption to applies, the company must be engaged in an active licensing business, which includes the active management and development of the intangibles and active licensing to third parties.
Continue Reading No Participation Exemption in the Absence of Active Business