OECD 2025 Model Tax Convention Update Commentary

This document is a Tax Policy Alert detailing the updates to the OECD Model Tax Convention (MTC) approved by the Council of the OECD on 19 November 2025. The updates include revisions and clarifications to various MTC Articles, particularly focusing on cross-border working scenarios and the implications for permanent establishment (PE) status. Notable changes include new commentary addressing when cross-border working from home may constitute a PE, the introduction of a time-based indicator for determining PE status, and an optional treaty provision for taxing activities related to natural resource extraction. The document outlines the relevance of these updates for businesses, especially in light of increasing remote work practices. It emphasizes the importance of reviewing flexible working policies to mitigate potential PE risks and suggests monitoring cross-border employee activities to ensure compliance with the new guidance. The document serves as a resource for understanding the implications of these updates for various sectors and organizational profiles.