handbook-tb

Brian J. Arnoldas well as the independent activities of physicians, lawyers, engineers,architects, dentists and accountants.”In general, a fixed base for purposes of Article 14 has the samemeaning as a fixed place of business under Article 5 (1) although somecountries consider the two expressions to have different meanings. Thecomputation of the profits attributable to independent personal servicesperformed through a fixed base under Article 14 is generally consideredto be subject to the same principles as the computation of profits attributableto a PE under Article 7. 43 However, Article 14 and its Commentarydo not contain detailed rules concerning the attribution of profits to afixed base similar to the rules in Article 7 and its Commentary. If Article14 is subject to the same principles as Article 7, the source country wouldbe entitled to tax only the net profits derived from independent servicesby an individual resident of the other contracting State.Article 14 of the OECD Model Tax Convention on Income andon Capital was deleted in 2000 with the result that income from servicesgenerally (that is to say, other than such income dealt with in specificarticles) is dealt with exclusively under Article 7. The deletion ofArticle 14 with several consequential changes (the most important ofwhich is the inclusion of a provision in Article 5 equivalent to Article14 (1) (b)) is provided as an alternative in the Commentary on Article5 of the United Nations Model Convention. 443.8 Income from employmentUnder Article 15 (Dependent personal services) of the United NationsModel Convention, income from employment derived by an individualresident of one State from employment exercised in the other Statemay be taxed in that other State (the source country) in any one of thefollowing three situations:43As noted in paragraphs 10 and 11 of the Commentary on Article 14of the United Nations Model Convention, some countries take the positionthat Article 14 permits taxation of independent services on a gross basis. Thisargument is based in part on the fact that Article 24 (3) is expressly applicableonly to a PE, not to a fixed base.44See paragraphs 15.1 – 15.26 of the Commentary on Article 5 of theUnited Nations Model Convention.68