The Organisation for Economic Co-operation and Development has published a new, updated version of its Model Tax Convention, used by OECD and other countries as a basis for the negotiation, application and interpretation of bilateral tax treaties, of which there are now more than 2500 in force around the world.

The OECD Model is periodically updated to take account of new developments and to reflect the experience gained by countries in the application of tax conventions. The 2005 edition incorporates the latest changes to the Model which were approved by the OECD Council on July 15, 2005 (these changes were released in draft form for comments on March 15, 2004.  Among the changes:

• The tax treatment of activities related to international shipping and air transport
• Cross-border income tax issues arising from employee stock-option plans
• Tax issues arising from cross-border pensions
• Multiple permanent establishments
• Revision of Article 26 and its Commentary concerning the exchange of information
• Various technical issues related to the interpretation of tax conventions