The 2025 Update to the OECD Model Tax Convention

Abstract

This note includes the contents of the 2025 update to the OECD Model Tax Convention (the 2025 Update), which was approved by the Committee on Fiscal Affairs on 13 October 2025 and by the OECD Council on 18 November 2025. The main changes to the OECD Model Tax Convention included in the 2025 Update are as follows: • Changes to Article 25 and its Commentary that include as a new paragraph 6 of Article 25 a provision that confirms the role of competent authorities in determining whether a matter falls within the scope of a tax treaty for purposes of the dispute resolution mechanisms provided under the General Agreement on Trade in Services (GATS). • Changes to the Commentary on Article 5 to clarify the circumstances in which an individual’s Home could constitute a “place of business” of the enterprise for which the individual works. These changes are an evolution of existing principles and ensure the Commentary reflects modern working arrangements, providing additional certainty as to when a fixed place of business permanent establishment will, and will not, be created by an individual working from a home or other relevant place. • Changes to the Commentary on Article 5 that add to the Commentary an alternative (optional) provision on activities in connection with the exploration and exploitation of extractible natural resources, together with related commentary. The centrepiece of the alternative provision is a lower permanent establishment threshold, which would be crossed after a