31 - Slovakia

Summary

The relevance of the OECD and UN Model Conventions and their Commentaries for the interpretation of Slovak tax treaties

The relevance of the OECD Model Tax Convention on Income and on Capital (OECD Model) and the United Nations Model Double Taxation Convention between Developed and Developing Countries (UN Model) for Slovak tax treaty negotiations is obvious. In concluding its bilateral tax treaties, Slovakia generally follows the OECD Model (except for the treaty with the USA (1993), which more or less follows the US Model) and has a high degree of respect for the OECD Commentaries. However, as a typical capital-importing country, Slovakia has historically concentrated on source taxation. The focus on source taxation has resulted in making certain reservations and observations on the OECD Model's concept of the allocation of taxing rights between two contracting states, as well as on the application of the concept of the UN Model in some of its treaties, at least with respect to certain kinds of income.

Slovakia is a member of both the UN and the OECD. Slovakia, as a successor state of the former Czechoslovakia, became a member of the UN in 1993. However, Czechoslovakia was an original member of the UN from 1945. Slovakia joined the OECD only in 2000. However, even before then, as a non-OECD Member country, the former Czechoslovakia concluded tax treaties based on the OECD Model with the countries that were already OECD Members. Deviations towards the UN Model (which was adopted in 1980 and revised in 2001) can be found in those treaties as well. All of the treaties mentioned are still valid.