7.3.4 Economic double taxation as a result of profit distributions

Preventing economic double taxation on profit distributions is not an objective of the OECD MTC. However, as this form of double taxation negatively influences the overall objective of the OECD MTC (i.e., stimulating cross-border activities), it seems logical to include a rule in the model to abolish economic double taxation on profit distributions in group situations. The same shareholding requirement as in the dividend article should be used. Eliminating economic double taxation as a result of profit distributions could be done by either an exemption or a credit method, similar to the approach chosen in the PSD.