ORGANISATION FOR ECONOMIC RESTRICTED

CO-OPERATION AND DEVELOPMENT

Paris, 28th April, 1971
CFA(71)3
Scale 2
Or. Engl.

COMMITTEE ON FISCAL AFFAIRS

ORGANISATION OF WORK
(Note by the Secretariat)

1. A number of organisational questions will call for

decisions at the first meeting of the new Committee. In some
instances, the questions to be decided will emerge more clearly
when the Committee has exchanged views on the three substantive
items of its agenda where the priority subjects come up for
examination (setting-up of ad hoc working parties or expert
groups as the case maybe, and the future calendar of meetings
of the full Committee). Others, which are dealt with in this
note, arise because of the continuing work on double taxation
and other items of business to be taken over from the work
programme of the former Fiscal Committee.
2, As regards double taxation, it was proposed in the
document C(70)207(2nd Revision), paragraph 10, approved by the
Council earlier this year, that, in view of its special and
continuing character, work on double taxation questions could
best be carried out by a special working party having a similar
composition to the former Fiscal Committee and on which all
Member countries would be represented. This working party
would report at intervals on the results of its work and its
proposals would come to the full Committee on Fiscal Affairs for
final approval and for transmission to the Council as required.
3. The former Fiscal Committee had set itself the objective
of completing a revision of the 1963 O.E.C.D. Draft Convention
on Double Taxation by the end of 1972. Progress to date with
this work is summarised in Annex A to this note. The Committee
on Fiscal Affairs, if it agrees with this programme, will thus
be called upon to take a decision to set up a Working Party on
Double Taxation, to confirm its work programme, and to fix a
date for its first meeting. It would perhaps be useful to invite
the Chairman of this Working Party, when he has been elected, to
report to the full Committee at a subsequent meeting on the
general state of work on the revision of the draft convention of
1963.1/
77-
]enhua.ly, foie revisions proposed to this convention will
have to be carried over, where appropriate, to the 1966
Convention on Estates and Inheritances.

80.493
CFA(71)3

4. The work of the former Fiscal Committee is presently

carried out with the help of working parties of which there
are quite a number, each being composed of a few country
delegates. The full list of such working parties which are
still active is given in Annex B to the present note, The ones
dealing with the revision of the 1963: Double Taxation Convention
are shown separately in this list and it is suggested that the
most convenient procedure would be for them to continue in
existence until they have completed the tasks confided to them,
keeping the same name but being referred to henceforth as sub-
groups of the Working Party on Double Taxation of the Committee
on Fiscal Affairs.
5. Four other working parties of the former Fiscal Committee
(abuse of conventions; .protection of the taxpayer; mutual
assistance in the collection and assessment of taxes; methods
of reducing tax at source) are dealing with subjects closely
related to double taxation and could presumably best become
sub-groups of the Working Party on Double Taxation also « 1/
6. Two working parties of the former - Fiscal Committee --. on
investment trusts and on depreciation allowances - have only
recently been set up and no substantive work has yet been done
on these subjects. It will be for the new Committee on Fiscal
Affairs to decide, in the light of its discussion of its own
future work methods, whether these two groups should be retained
and, if so, in what form....

1/ The Working Party:'on Nuclear Insurance Risk is carrying out

- a short-term mandate which it is expected to complete shortly.
In the meantime, : it could continue as a sub=group of the
Working Party on Double Taxation,
 •
CFA(71 )3
Annex

ANNEX A
Pro ress of Work on 1963 Draft Double Taxation Convention

Article 1 Personal Scope Work completed

TT
2 Taxes covered Work completed
TI
3 General Definitions Work completed
H
4 Fiscal Domicile Work completed
iT
5 Permanent establishment Early stages. Work will
probably not be completed
before mid-1972
it
6 Income from immovable
property Work completed
TI
7 Business profits Not before 1972
IT
8 Shipping, inland water- Work should be completed
ways transport and air very shortly
transport
TT
9 Associated enterprises Some work completed. May
require further changes
because of 7.
TI
10 Dividends Not before 1972
II
11 Interest Work completed
H
12 Royalties Work completed
IT
13 Capital gains Work completed
II
14 Independent personal
services
TI
15 Dependent personal
services
16 DirectorsT fees Report expected June 1971:
17 Artistes and athletes possible conclusion by end
18 Pensions of 1971
19 Governmental functions
20 Students
21 Income not expressly
mentioned
IT
22 Capital Work completed
FT
23 Exemption and credit No work as such. May be
method consequential changes,
IT
24 Non-discrimination Work should be completed
very shortly
Ti
25 Mutual agreement Not before 1972
procedure
IT
26 Exchange of information
TT
27 Diplomatic and consular
officials No major changes
28 Territorial extension contemplated
29 Entry into force
30 Termination
 CFA(71)3 4
Annex -

ANNEX B

Existing 1forkin Parties of the Fiscal Committee

In connection with the revision of the 1963 Double Taxation

Conven ion

1.. Permanent Establishment (Article 5)

4. Non discrimination (Article 24)
7, Allocation of Profits (Articles 7 and 9)
14. Mutual Agreement Procedure (Article 25).'
23. Dividends (Article 10)
28, Personal Income (Articles 14 to 21)
29. Shipping and Aircraft Profits (Article 8)
30. Partnerships (various Articles)

On double taxation and related .uestions

21 Abuse of Conventions
22. Protection of the Taxpayer
26. Methods of reducing tax at source
31. Mutual Assistance in the Collection and Assessment of Taxes
33. Investment Trusts

On other. guestions
16. Nuclear insurance risk
32. Depreciation allowances