A New Model Tax Convention for a World of Increasing Remote Work and Mobility of Individuals

Model Tax Conventions have been the subject of eternal and very heated discussions regarding corporate income taxation, particularly in the recent times as a result of the BEPS Project and its epilogue (the Pillars). However, very little attention has been paid to the challenges and risks posed to tax treaties by the generalization of remote work (a phenomenon that is on the rise, most notably after the 2020 pandemic) and the consequent increased opportunities for individuals to move across jurisdictions, temporarily or permanently relocate in new jurisdictions or even embark on a nomadic life. In the present paper, the author will attempt to provide an in-depth reflection on the impact that these phenomena may trigger in the application of tax treaties on the taxation of income of both individuals and linked entities. They will subsequently propose adjustments to the Model Tax Conventions such as reviewing the tie-breaker rules for resolving dual residency issues (article 4), reinterpreting or modifying the permanent establishment concept for the taxation of business profits (article 5), assessing the elimination of the independent personal services clause (article 14) and revising the rules on the taxation of employment income (article 15). In all cases, specific and near final proposals will be provided for the redrafting of the relevant articles.