The Origins of Article 5(5) and 5(6) of the OECD Model
- J.F. Avery Jones; J. (Jürgen) Lüdicke
- World Tax Journal, 2014 (Volume 6), No 3
- 10 October 2014
This article by authors from the two countries which comprised the OEEC working party that originally drafted the permanent establishment article considers the history of the agency permanent establishment provisions from their respective legal perspectives in order to try to understand what was in the minds of the members of the Working Party. This approach is assisted by the fact that two years before their work for the OEEC the United Kingdom and Germany had concluded a tax treaty. The authors have drawn on material in their respective national archives about the negotiations of that treaty to show the understanding that the working party members brought to the OEEC. One of the conclusions is that they never appreciated the differences in their respective laws of agency which has led to an unsatisfactory result caused by the two legal systems approaching article 5(5) of the current OECD Model in different ways and the exceptions in article 5(6) having different effects in each system.