U.S. Proposes Changes to Model Tax Treaty Meant to Influence BEPS Talks

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May 20 — The Treasury Department's May 20 release, for public comment, of proposed changes to the U.S. Model Income Tax Convention are designed to have an impact on the work of the international project on base erosion and profit shifting, a Treasury official said.

“We want the draft to influence the debate at the OECD” on BEPS, Henry Louie, deputy to the international tax counsel (Treaty Affairs) at Treasury, said May 20. Treasury's proposed revisions include language that seeks to address the problem of stateless income, define and prohibit special tax regimes, and tax the foreign parents of domestic companies that are trying to invert. Louie made his remarks at a D.C. Bar Association event.

The proposed changes to the U.S. model treaty come shortly before the Treasury officials are to meet with the Organization for Economic Cooperation and Development in June.