The OECD today published a 2005 edition of its Model Tax Convention.

This Convention is used by OECD and other countries as a basis for the *”negotiation, application and interpretation of bilateral tax treaties”*, of which there are reportedly more than 2500 in force around the world.

The OECD updates the Model periodically to take into account new developments and to reflect the experience gained by countries in the application of tax conventions. The updated version incorporates the latest changes approved by the OECD Council back in July, after a public discussion draft was issued for comment earlier in the year.

A release from OECD headquarters today said these changes resulted from work done by the Committee on Fiscal Affairs on a number of issues, and in particular on:

• the tax treatment of activities related to international shipping and air transport;

• cross-border income tax issues arising from employee stock-option plans;

• tax issues arising from cross-border pensions;

• the issue of multiple permanent establishments;

• the revision of Article 26 and its Commentary concerning the exchange of information;

• various technical issues related to the interpretation of tax conventions.

The new edition also includes changes made by a number of OECD and non-OECD countries to their observations, reservations or positions on the OECD Model Tax Convention.