As published on transferpricingnews.com, Tuesday 9 June, 2020.
The Finnish Tax Administration has issued guidance on some of the common tax treaty provisions.
The guidance – published on June 2 – comprises an article-by-article review of the provisions contained in a tax treaty and follows the order of the OECD Model Tax Convention.
The guidance includes information on the relationship between tax treaty law and domestic law, the role of the OECD Model Tax Convention, and the effect of the OECD’s Multilateral Instrument on BEPS, among others.
The guidance notes that, as a starting point, the provisions of a tax treaty should generally be interpreted in accordance with the commentaries to the OECD Model Tax Convention.
“This is the case regardless of whether the other party to the tax treaty is a OECD member or not. As such, the reservations are not grounds for deviating from the interpretation in accordance with the OECD Model Tax Convention,” it notes.
The guidance adds that the principles arising from the Vienna Convention on the Law of Treaties, which Finland has ratified, are taken into account when applying tax treaties.
The guidance states that the OECD’s Multilateral Instrument on BEPS (BEPS MLI), adopted in Finland on February 13, 2019, must be taken into account when applying tax treaties.
The complete guidance is available on the website of the Finnish Tax Administration.