In most tax treaties, Article 6 contains a provision that defines the concept of real estate on the basis of the legislation of the contracting state in which the property is located. Therefore, where a tax treaty applies to the taxation of a taxpayer, there may be a situation in which the provisions of the treaty relating to real estate apply to income from the taxpayer`s property located abroad, even if it is a type of asset that, under Finnish law, would not be defined as real estate. Some tax treaties contain an article on royalties, which contains additional provisions on the issue of technical services and their compensation; these contracts generally have the terms « royalties or royalties for technical services » as the title of the article. In this way, the OECD`s model tax convention is also respected in these contracts and the definition of « royalties » remains the same. The royalty section contains only an additional set of provisions relating to the tax treatment of royalties paid for technical services. Tax evasion is rarely linked to the terms of a contract and the fact that a contract is applied. It should be noted that any case within the scope of anti-abuse rules has its particular characteristics. As a result, it may not be possible to compare one case to another in order to draw uniform conclusions on the issue of tax evasion. In order to draw the line between abuse and non-abuse, it may be useful to study the examples cited in the commentary in Article 29, paragraph 9. If the taxpayer is not sure that the authorities want to apply an abuse rule because of the actual circumstances of the subject, we recommend that an application for a preliminary decision be made to clarify the situation. The fifth section of the model tax treaty deals with the date on which a business is considered a stable institution in the other contracting state. Under the treaty provisions, a State Party may tax the profits of a company in the other contracting state if the company has carried out its activities through a stable establishment located in the State party.
This memorandum deals with the typical provisions of tax treaties. The aim is to give a general description. If so, the text below contains links to more information on the types of income relevant and their tax treatment, which are often available in a detailed guide on the tax administration`s website.