Transparent entities rule treats income of fiscally transparent structures as resident income, restricting treaty exemptions and credits. Article 3 treats income derived by or through entities or arrangements regarded as fiscally transparent as income of a resident of a Contracting Jurisdiction, but only to the extent that jurisdiction taxes the income as the resident's. It limits treaty provisions that would require exemption, deduction or credit solely because the income may also be taxed by the other Contracting Jurisdiction. The Article permits specified reservations, requires Parties to notify the Depositary of pre-existing detailed treaty provisions, and provides that where all Parties notify, the treaty provision is replaced by paragraph 1; otherwise paragraph 1 supersedes only to the extent of incompatibility.
Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
Provisions expressly mentioned in the judgment/order text.
Transparent entities rule treats income of fiscally transparent structures as resident income, restricting treaty exemptions and credits.
Article 3 treats income derived by or through entities or arrangements regarded as fiscally transparent as income of a resident of a Contracting Jurisdiction, but only to the extent that jurisdiction taxes the income as the resident's. It limits treaty provisions that would require exemption, deduction or credit solely because the income may also be taxed by the other Contracting Jurisdiction. The Article permits specified reservations, requires Parties to notify the Depositary of pre-existing detailed treaty provisions, and provides that where all Parties notify, the treaty provision is replaced by paragraph 1; otherwise paragraph 1 supersedes only to the extent of incompatibility.
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