This is a requirement of Action 6 of the action plan, relating to preventing the granting of treaty benefits in inappropriate circumstances. This states that a pension fund should be considered to be a resident of the state in which it is constituted regardless of whether that pension fund benefits from a limited or complete exemption from taxation in that state.

Any changes need to be implemented via the OECD model tax convention.

The OECD has released a discussion draft which includes changes to Articles 3 and 4 of the convention, and to the commentary on these articles, to clarify that a pension fund is considered to be a resident of the state in which it is constituted for the purposes of tax treaties.

The deadline for comments on the proposals is 1 April 2016 by e-mail to [email protected] in Word format.

The discussion draft and feedback will be discussed at the May meeting of the OECD working party.

The discussion draft on treaty residence of pension fund is here