handbook-tb

Adolfo Martín Jimenézon Article 5 of the United Nations Model Convention explicitlyaccepts paragraph 18 of the Commentary on Article 5 of theOECD Model Convention, which means that the geographicaland commercial coherence test will also apply with regard toArticle 5 of the United Nations Model Convention. However,the effects of such a paragraph should probably be limited toArticle 5 (3) (a), as the main reason for the existence of Article5 (3) (b) is precisely to avoid the geographical coherence test. 88The key limit for this subparagraph is “the same or a connectedproject,” that is to say, commercial coherence; 89‣ ¾ Article 14 of the United Nations Model Convention refers toindependent personal services, which may be taxed at source ifthey are connected with a fixed base or physical presence in thesource country. This Article may have some interaction (andpose interpretative problems) with both deeming provisions inArticle 5 (3) of the United Nations Model Convention. However,it extends the source-country rights to cover not only the remunerationof the enterprise, as in Article 5 (3) (b) of the UnitedNations Model Convention, but also the remuneration of theindividual providing services to that enterprise. The differencesbetween the PE and the fixed base concepts for some countriesare also arguments for the retention of Article 14 of the UnitedNations Model Convention in tax treaties;‣ ¾ Article 5 (4) of the United Nations Model Convention, unlikeArticle 5 (4) of the OECD Model Convention, excludes deliveryof goods from the preliminary and auxiliary activities ofsubparagraphs (a) and (b). In this regard, paragraph 17 of the88Ibid., at 67, where it is suggested that the main goal of Article 5 (3) (b)of the United Nations Model Convention is to overcome the problems of thegeographical coherence test.89On the interpretation of “the same or a connected project,” see paragraph12 of the Commentary on Article 5 of the United Nations Model Convention;see also “Article 5: the meaning of ‘the same or a connected project,’ ”presented at the ninth session of the United Nations Committee of Expertson International Cooperation in Tax Matters, Geneva 21-25 October 2013(E/C.18/2013/CRP.2), available at http://www.un.org/esa/ffd/wp-content/uploads/2014/09/9STM_CRP2B_Article5.pdf; and paragraph 42.41 of theCommentary on Article 5 of the OECD Model Convention.372