Non-discrimination clause in tax treaties – Select issues and recent developments – Part 1

<<The purpose of this series is to have discussion on non-discrimination clause of the bilateral tax treaties considering the issues surrounding it along with the Indian judicial pronouncements>>

Article 24 of the OECD Model Convention deals with Non-discrimination. Article 24 is a special rule providing for avoidance of discrimination against nationals or residents of another contracting state. However, the non-discrimination obligations of Article 24 apply only if nationals or residents of two states are comparably situated. For example – for Non-discrimination article to apply, they should either carry on same activities or be in the same circumstances.

The essence of non-discrimination article is to prevent unfair taxation as distinct from preventing double taxation. Bird eye view on the types of non-discrimination discussed in the tax treaties –

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