Analysis of the OECD’s 2025 Commentary

Abstract

This article examines the 2025 update to the Commentary on the OECD Model Tax Convention on Income and on Capital, focusing on the new interpretive framework applicable to permanent establishments arising from cross-border work performed at a home or other relevant place. The revision replaces the former paragraphs 18 and 19 of the Commentary on Article 5 with a set of operational indicators built around the concept of commercial reason and a working-time reference point, without amending the text of Article 5 itself. It also addresses ancillary amendments concerning the optional extractives provision under Article 5, the interaction between Article 9 and the interest-deductibility limitation rules derived from BEPS Action 4, the insertion of a new paragraph 6 into Article 25 on the mutual agreement procedure in the context of GATS, and the clarifications to Article 26 on secondary uses of exchanged information.