On 17 February 2016, the US Treasury Department issued a newly revised US Model Income Tax Convention (the "2016 Model") and an accompanying preamble to the 2016 Model. The Treasury Department also issued a related Press Release on the same day.
The Treasury Department states in the Press Release that many of the 2016 Model updates reflect technical improvements developed in the context of bilateral tax treaty negotiations and do not represent substantive changes to the prior model.
The Treasury Department further states that the 2016 Model includes a number of new provisions intended to eliminate double taxation without creating opportunities for non-taxation or reduced taxation through tax evasion or avoidance. Such provisions include the following:
The Treasury Department also states that the 2016 Model reflects comments that have been received in response to the proposed model treaty provisions that were released on 20 May 2015 and that those comments resulted in a number of modifications to the proposed model treaty provisions. The Treasury Department notes that it plans to release a detailed technical explanation of the 2016 Model this spring.