Art. 24(5) of the OECD Model in Relation to Intra-Group Transfers of Assets and Profits and Losses

This article examines Art. 24(5) of the OECD Model (discrimination on the ground of foreign ownership) in so far as it affects domestic law provisions dealing with grouping of profits and losses and transfers of assets within a group. The OECD Commentary argues that it can never apply to such grouping provisions where there is non-resident ownership. The authors argue that this is too widely stated and there are good arguments why in particular it does not require the transfer of profits or assets outside the taxing jurisdiction because the ground for denying the relief is not ownership. However, there are also good arguments why it does apply to some grouping provisions, depending on their details and structure, of which there is a wide variety in the countries represented by the authors. The article concludes that the OECD Commentary needs a more sophisticated analysis of this topic.