The relevance of the OECD and UN Model Conventions and their Commentariesfor the interpretation of Estonian tax treaties

Estonian tax treaties are based on the OECD Model Tax Convention on Income and onCapital (OECD Model), although certain provisions are historically framed inline with the United Nations Model Double Taxation Convention between Developedand Developing Countries (UN Model). New tax treaties are generally based on thelatest version of the OECD Model.

The positions in Estonian tax treaties that differ from the OECD approach canoften be found in the OECD Commentary under the positions of the non-Membercountries. These positions can broadly be divided into two categories: the firstcategory consists of the provisions that extend to Estonia's rights to tax theincome at source; and the second category contains provisions of an explanatorynature. The provisions in the first category have mostly been taken from the UNModel.

On 10 May 2010 Estonia was invited to join the OECD and the Accession Agreementwas signed on 3 June 2010. In Annex 1 to the Accession Treaty – ‘Specificremarks on acceptance of OECD legal instruments’ – Estonia has accepted therecommendation of the Council concerning the OECD Model Tax Convention, but hasmade certain reservations to the Model. Therefore, as of the moment that theAccession Agreement becomes effective, Estonia’s position as a non-Membercountry will be replaced by the reservations to the Model.