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KPMG report: 2025 update to OECD Model Tax Convention

 A KPMG report discussing the changes under the 2025 update

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january 14, 2026

The Organisation for Economic Co-operation and Development (OECD) in November 2025 released the 2025 update to the OECD Model Tax Convention on Income and on Capital, which included the following changes:

  • Clarification on how cross-border remote working arrangements may give rise to permanent establishments (PEs)
  • Introduction of an optional provision for taxing income from natural resource extraction based on a time test
  • Clarification of the application of transfer pricing rules to financial transactions
  • Guidance on application of Pillar Two Amount B

Read a December 2025 report prepared by KPMG International that discusses the changes under the 2025 update.

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