Per Aspera Ad Astra: Towards the International Fiscal Meaning of the Concept 'Beneficial Owner'

Abstract: The term ‘beneficial owner’ was first internationally introduced by the OECD in the Model Convention in 1977 and since that time it serves as one of the anti-abuse rules directly provided for in double tax treaties. The concept is critical for determining the eligibility of a person for the tax treaty benefits and for the allocation of taxing rights between two contracting states with regard to dividends, interest or royalties income. The latter function as well as the function of counteracting the treaty shopping and avoidance of multi-layers of taxation could be fulfilled through the uniform or so called symmetrical application of the concept by contracting states. The paper reveals the history and background of the concept in international tax law by reference to the relevant legal sources (OECD documentation, EU Directives, international case-law) and attempts to identify the most significant (core) elements of the notion, which might facilitate defining the concept on international level. The author also provides her suggestions as for the improvement of the international fiscal meaning of the concept in the context of the latest OECD Discussion Draft released on 29 April, 2011.