Explaining Reservations to the OECD Model Tax Convention: An Empirical Approach
Even though the OECD Model Tax Convention is not legally binding, both member and non-member States of the OECD have included reservations to express their disagreement with certain aspects. In order to explain why the number of reservations included varies so greatly from country to country, we have formulated several hypotheses which we have tested empirically. The results of our analysis show that being an OECD member (which is strongly and positively correlated with GDP per capita) or a net capital exporter are factors associated with fewer reservations. Thus, despite having a worldwide influence, the OECD Model serves better the interests of developed States.