A Tale of Two Subject-to-Tax Rules

Abstract

This article analyses and compares the two proposals for modifying tax treaties by inclusion of a Subject to Tax Rule (STTR), one developed by the United Nations Committee of Tax Experts (UNTC), and the other through the OECD/G20 Inclusive Framework on BEPS, as part of the Two Pillar proposals.

Although the two proposals have similar intentions, there are important differences between the two that will help countries consider what might be best for them. It will also help taxpayers understand the two proposals and their characteristics and potential consequences.

Keywords: BEPS, STTR, Subject to Tax Rule, International Taxation, Profit-Shifting, Tax Treaties, DTA

JEL Classification: H21, H25, K34, E62