The Classification of the Payment derived from a Guarantee Agreement in Tax Treaties

Abstract

This article examines the classification of payments derived from guarantee agreements in tax treaties based on the OECD Model Convention, both in the 1963 version and in the current version (consolidated version of 2010, with the updates of 2014). The article intends to demonstrate that a guarantee agreement does not meet the requirements for its characterization as a debt-claim, which constitutes an essential prerequisite for its classification in article 11 of tax treaties patterned on the OECD Model Convention.