handbook-tb

Graeme S. Cooper‣ ¾ Protect from tax income from services rendered by a residentto the government of the other State or as a member of a diplomaticor consular mission of the other State;‣ ¾ Protect from tax income earned by a resident student or apprenticein the form of a scholarship provided from another State;‣ ¾ Give tax relief in the residence country for income taxed in theother State; and‣ ¾ Ensure residents have unfettered rights to protection againstdiscrimination and the ability to seek assistance from the competentauthority.The OECD also notes the possibility that the list could beexpanded to deal with other possible situations where the partiesmight wish to afford treaty benefits to a resident, and gives the examplesof pensions and social security benefits.5. Theme 3 — Tax considerations in choosing treatypartnersAction 6 in the OECD Action Plan on BEPS refers specifically toaddressing “the tax policy considerations that, in general, countriesshould consider before deciding to enter into a tax treaty with anothercountry.” 40 The OECD Action 6 — 2014 Deliverable proposes to addtext to the Introduction to the Commentary articulating some of therelevant considerations explaining why countries should be very reluctantto negotiate tax treaties with low- or no-tax jurisdictions. This isan important discussion because it serves as a counter to the apparentassumption in many countries that a bigger tax treaty network isalways to be preferred, even if those treaties are with low- or no-taxjurisdictions. Clearly, there are significant non-tax considerations thathave a bearing on the decision whether to have a tax treaty with anothercountry, but insofar as tax considerations are important, developingcountries should have a clear understanding of the tax costs and taxbenefits for them from negotiating a treaty.40OECD, Action Plan on Base Erosion and Profit Shifting, supranote 3, at 19.322