Research On Beneficial Owner Rules In The OECD Model

The rules of beneficial owner in the OECD model are important rules to prevent tax evasion in the three clauses of dividends,interest and royalties.The OECD model is the model that most countries in the world follow when they sign tax treaties,and the term "beneficial owner" is widely used.The correct interpretation of the beneficial owner rules can prevent the abuse of international tax agreements,safeguard national tax interests,and effectively avoid double taxation.However,there is no clear definition of the beneficial owner and different countries have different interpretations on the relevant rules of beneficial owner.The connotation of beneficial owner rules should apply the provisions of the agreement or be developed by the State party;The application of the beneficial owner rules should be based on economic substance or legal nature;These issues,such as differences in the ownership of the beneficial owner,need further exploration.This paper analyzes the above problems from the rules of beneficial owner and precedents of OECD member countries.The provisions of the income tax law of the Netherlands 2001 apply the principle of substantive over form to the rules of beneficial owner.The royal shell case shows how Dutch judicial practice determines the beneficial owner of dividends,it does not require the payee of dividend must have control over the shares that generate the dividend income.Therefore,the beneficial owner is not necessarily the owner of the stock.British domestic law considers that the payee of dividend does not necessarily have control over the corresponding shares of dividend income,and does not require the beneficial owner to be the owner of the shares.If a person has free disposal of his dividend,he belongs to the beneficial owner of the dividend.The Indo case applies the economic substance analysis method to the beneficial owner rule,and the provisions of the American domestic law to the beneficial owner rules also tend to the economic substance principle.The judge in the case of New York guangdong financial company regards the taxpayer's financial statements must be the same as the essence of the transaction as the new premise for applying the principle of substance over form.The relevant Canadian rules set the standard of economic substance,but in the Prevost case,the Canadian courts applied the legal substance to the beneficialowner rules.This judgment shows that the principle of substance over form is not fully applied in Anglo-American law system countries to deal with the differences in the application of beneficial owner rules.This paper compares and analyzes the provisions and typical cases of the rules of beneficial owners in various countries,and uses the explanation methods in the OECD model and notes and the two discussion drafts of the rules of beneficial owners in the OECD to analyze the development trend.It can be concluded that beneficial owner concept should apply contextual meaning.Beneficial owner shall be determined according to its legal nature and economic substance.The beneficial owner's right of control does not extend to the underlying property or rights that generate the income.In 2018,China issued announcement no.9 to clarify the relevant rules of beneficial owner,but there are differences between the concept of beneficial owner in China and the trend of the OECD model.The certified standard of beneficial owner is vague;The rules for beneficial owner are at a lower legal level.So that the beneficial owner concept should be linked to the OECD model trends;Refining beneficial owner rules;Raising the legislative level that provides rules for beneficial owner.In this way,it can better guide tax practice and promote tax fairness.