Taxation and Non-Discrimination, A Reconsideration of Withholding Taxes in the OECD

This article deals with the different concepts of non-discrimination on the basis of nationality in the OECD Model and indirect or covert discrimination in the European Treaties, as interpreted by the European Court of Justice. It discusses the different tax results of both concepts for the distribution of dividends and interest and includes a discussion of a case of distributions by a collective investment fund. It concludes that the divergent application of the concept of non-discrimination is rather justified. Problems of discriminatory taxation on capital income received or distributed by non-resident taxpayers could be resolved by adding a few recommendations to the Commentary on Art. 24 of the OECD Model and by including some measures against double taxation in the treaty articles related to these specific categories of income.