International Taxation of Directors’ Fees: Article 16 of the OECD Model or How To Reconcile Disagreement among Neighbours

This contribution analyses the taxation of directors’ fees in an international context, as prescribed under article 16 of the OECD Model. After a preliminary assessment of the provision and its relationship to the other provisions in the Model, two essential questions are defined. The first part of this article focuses on the conditions for the application of article 16 of the OECD Model and their interpretation in the Belgian-German double tax treaty practice. In the second part of this contribution, it is examined how taxing rights are attributed once the conditions of application of article 16 of the OECD Model are fulfilled. In the light of the fundamental principles in the allocation of taxing rights, it is analysed whether the article is consistent with the other provisions on income from services in the OECD Model.