Introduction

The 2025 Update to the OECD Model Tax Convention (MTC) reflects a series of targeted doctrinal clarifications rather than a wholesale structural revision. Taken together, the changes respond to longstanding interpretive uncertainties across three thematic pillars: the scope of permanent establishment in modern working arrangements and extractive industries; the interface between Article 9 transfer pricing principles and domestic interest limitation rules; and the procedural architecture surrounding dispute resolution and information exchange. This post offers a structured analysis of each change.

Article 25  Mutual Agreement Procedure and GATS Competent Authority Confirmation

The most structurally novel amendment is the introduction of a new paragraph 6 to Article 25, which formalises 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). This provision addresses a long-standing ambiguity at the intersection of tax treaty law and the WTO/GATS framework. Article XVII(4)(d) of GATS excludes from its non-discrimination disciplines measures that are "covered by" a tax agreement  but whether a given measure is so covered requires a determination that has, until now, lacked a clear procedural home in the MTC. The new paragraph 6 fills this gap by assigning that competency to the treaty's competent authorities, anchoring the determination within the mutual agreement procedure framework.

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