The approach of the OECD Model Convention to the taxation of the Trans-National Enterprise
This thesis aims at exploring the Trans-National Enterprise (TNE) as a leading business
and economic actor at the international taxation level, and the legal (international tax)
framework surrounding it.
It is spread over eleven chapters within four main parts; the first part addresses the
question of what is the TNE, why is it important, and what is the international tax law that
governs it. The first chapter addresses the importance of the THE in the modern world
(economy) and the tax implication of that role. The second presents the international tax
system that governs the TNE, where the OECD Model Convention claims a significant
part. The third chapter explores the notion of the THE and the prospects of applying the
enterprise entity theory on the taxation of the THE members.
Part two addresses the obstacles against applying the enterprise entity approach on the
taxation of the TNE; the fourth chapter examines the legal principles that stand in the way
of applying the enterprise entity theory, especially legal separation; the fifth chapter
presents the OECD MC's position towards the principles of arm's length and legal
Part three addressesth e problems causedb y this attachmentt o arm's length and legal
separation; chapter six explores the problems of international tax avoidance; chapter seven
explorest he role of legal separationin the different tax treatmentb etweent he PE form and
the subsidiaryf orm. Chaptere ight addressetsh e problem of entity classification.
Part four explores the prospects of an alternative approach to the taxation of the THE from
within the OECD MC, by examining the case for aggregation (consolidation) in chapter
nine, and the case for a formula-based allocation (based on the profit split method) in
Chapter eleven recapitulates the conclusions from the previous chapters reaching to the