The definition of a 'place of effective management' at article 4 paragraph 3 of the 2014 OECD Model Tax Convention

The jurisdiction to tax is based on the connection of either the person or the income namely the concept of residence and the source taxation. The residence principle is based on the presumption that a state will tax its residents on their global income, while the source taxation is based on the connection of a particular income earn to the other state. Jurisdictions, for decades now enter into tax treaties to reduce or eliminate double taxation by relinquishing completely or partly their taxing rights. Yet, in international taxation when two or more states impose taxes on the same taxpayer for the same income double taxation occurs. Interpretation of tax treaties is the cornerstone on reaching the real objective and purpose of the treaties itself. Therefore, is vital to know, how to approach the intricate world of tax treaty interpretation. This paper will shed some light on the interaction of Vienna Convention on the Law of Treaties Article 31 and the OECD Model Convention Article 3(2) on interpreting tax treaties.