An insight into the development of the royalty definition contained in modern model tax conventions and the evolution of the international tax meaning of 'beneficial ownership'
Thesis (MComm) -- Stellenbosch University, 2011.
ENGLISH ABSTRACT: The study’s focus is to provide an analysis of the development of the definition of royalties in the context of Model Tax Conventions (‘MTC’). The secondary focus of the study is to analyse the evolution of the concept of beneficial ownership as a limitation to the application of the treaty benefits contained in royalty provisions of the MTC’s. In terms of the focus of the study, it is concluded that the most significant developments with regards to the definition of royalties, since originating in the League of Nations Model Convention’s first Draft Model in 1928, occurred during the final Committee meetings held in Mexico and London (producing the Mexico and London Draft Models respectively) and in terms of the Organisation for European Economic Cooperation (‘OEEC’), which set out the founding principles of the definition. It is also concluded that the later MTC’s did not significantly change the Treaty royalty definition but added clarification as to the meaning of the term by way of the Commentaries to the MTC. The secondary focus of the study concludes that the term has not really changed since it was first used in an international context. The most recent case law on the matter confirmed that the attributes of the concept is that of ownership and that the matter is one which needs to be decided from a legalistic perspective and should not be based on the economic interpretation of the term ‘beneficial ownership’, which could effectively turn the concept into a broad anti-avoidance provision.
AFRIKAANSE OPSOMMING: geen opsomming