Number 8 - 2007 contains the following:
 

Under Art. 7(1) of the OECD Model Tax Convention, a country is authorized to tax a resident of the other country carrying on business in the first country through a permanent establishment (PE) only to the extent of the profits attributable to the PE. Art. 7(2) provides the key principle for determining the profits attributable to a PE, namely, the profits it might be expected to make if it were a separate and distinct enterprise dealing wholly independently with the enterprise of which it is a part. Art. 7(2) also states that the profits so determined must be attributed to the PE "in each Contracting State". This seemingly simple phrase has always appeared to be curious and out of place. This article examines the meaning of "in each Contracting State" and explores the extent to which the OECD Model requires the symmetrical application of the business profits attributable to a PE.

This article reports on the proceedings of the conference on the legal status of the Commentaries on the OECD Model Tax Convention on Income and on Capital, held in September 2006 and hosted by Leiden University. The debate on the legal status of the OECD Commentaries recently received new impetus following the publication of a study on Arts. 31, 32 and 33 of the Vienna Convention on the Law of Treaties and their application to tax treaties. The primary focus now is on the general principles of international law. In particular, opinions differ on the question whether the Commentaries can be a source of legal obligations through the principles of acquiescence and estoppel, both of which are founded on considerations of good faith and equity and provide specific protection of settled expectations.

This article focuses on the withholding tax on interest paid by Swiss companies to related companies residing abroad and vice versa. The article discusses the possibilities of qualifying for relief from the withholding tax by drawing on the principles of domestic legislation, international tax treaties, the Swiss-EU Agreement as well as the EC Interest and Royalties Directive.