The 2025 Revision of Article 8 of the UN Model Tax Convention: A Paradigm Shift in the Taxation of International Air Transport Income

DOI

10.2991/978-94-6239-699-9_42How to use a DOI?

Keywords

Article 8; UN Model Tax Convention; International Air Transportation; Taxing Rights

Abstract

For over nine decades, international tax law has adhered to exclusive residence-based taxation for international transport income, a principle established by the League of Nations in 1928 and endorsed by the International Civil Aviation Organization (ICAO). However, between 2023 and 2025, the UN Committee of Experts on International Cooperation in Tax Matters undertook a paradigm-shifting revision, introducing source-based taxation as the primary alternative (Alternative A) and explicitly extending Article 8’s scope to international air transport. Through detailed analysis of UN Committee documents from the 28th through 31^st sessions (2024-2025), this paper examines the procedural evolution from initial proposals (CRP.14, CRP.12) through the approval of the Subcommittee’s comprehensive proposal (CRP.29) at the 29th session. The paper investigates developing countries’ motivations for advocating source-based taxation, including revenue mobilization imperatives, perceived inequities in the existing system, and alignment with contemporary international tax reforms. This paper identifies critical technical issues raised during Committee deliberations—including treatment of multi-leg journeys, circularity between definitional provisions, and net-basis taxation implications—and analyzes stakeholder positions, particularly the aviation industry’s concerns regarding double taxation risks and administrative complexity. This paper demonstrates that while source-based taxation may address developing countries’ revenue concerns, successful implementation requires careful resolution of technical drafting issues, harmonization with existing bilateral treaties and ICAO policies, and mechanisms to prevent double taxation. This paper concludes with policy recommendations for treaty negotiators, tax administrators, and international organizations navigating this fundamental shift in international air transport taxation.

Copyright

© 2026 The Author(s)

Open Access

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TY  - CONF
AU  - Helin Li
AU  - Hanshuo Jia
AU  - Xiaoyu Li
PY  - 2026
DA  - 2026/06/02
TI  - The 2025 Revision of Article 8 of the UN Model Tax Convention: A Paradigm Shift in the Taxation of International Air Transport Income
BT  - Proceedings of the 2026 4th International Conference on Digital Economy and Management Science (CDEMS 2026)
PB  - Atlantis Press
SP  - 392
EP  - 400
SN  - 2352-5428
UR  - https://doi.org/10.2991/978-94-6239-699-9_42
DO  - 10.2991/978-94-6239-699-9_42
ID  - Li2026
ER  -