TECHNICAL REVIEW OF THE DRAFT ARTICLE 12B UNITED NATIONS MODEL TAX CONVENTION

TECHNICAL REVIEW OF THE DRAFT ARTICLE 12B UNITED NATIONS MODEL TAX CONVENTION

In June 2020, the UN Committee of Experts on International Cooperation on Tax Matters (“UN Committee”) released a proposal by one of its drafting groups for an additional provision (Article 12B) in the UN Model Tax Convention and accompanying Commentary to deal with certain aspects of the taxation of a digitalised economy. This technical review is designed to assist ATAF members in their analysis of the draft Article 12B.  

Many ATAF members have reported difficulties in taxing highly digitalised businesses. Their economies are rapidly becoming more and more digitalised and that digitalisation often enables multinational enterprises (MNEs) to carry out business in African countries with no or very limited physical presence in those countries. This makes it difficult for African countries to establish taxing rights over the profits the MNE is making from those business activities.

Download Preview