U.N. Tax Committee Notes Support for Revising Royalty Definition

By: Stephanie Soong Johnston

The U.N. Tax Committee has decided against including software payments in the U.N. model treaty’s definition of royalties but will note in the updated treaty commentary that some of its members support doing so. The committee on April 28 approved changes to the commentary on article 12 of the U.N. model tax convention, including a new paragraph reflecting final text for a new article 12B, which allows for the taxation of automated digital services. The text says that article 12B may cover downloads of software and some other types of digital content.

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By Stephanie Soong Johnston, posted on Thursday April 29, 2021

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