Business Income (Article 7 OECD MC)

Reuven S. Avi-Yonah[1] Kimberly A. Clausing[2] 1. Introduction The general purpose of tax treaties is to implement the consensus underlying the international tax regime by shifting the right to tax passive income from the source to the residence country, and by limiting the ability of source countries to tax active income to income attributable to a permanent establishment.[3] Article 7 of the OECD MC implements this latter function by stating…