2.4.6 Interim conclusion: existing group concepts

The only group definition that truly takes into account the economic entity is the unitary business approach. In this group definition both effective control and integration are reflected. Additionally, a true unitary business approach should be applied on a worldwide rather than a per country basis. Treating the worldwide parts of a group of companies as a single entity on a mandatory basis is in line with economic reality and leads to legal form neutrality. This diminishes tax avoidance opportunities.

It would seem that the group definition should be given a broad scope of application, thus eliminating any room for tax planning possibilities and creating clarity. To this end, it would seem obvious to follow the scope of application already used in the OECD MTC, except for natural persons. This would mean that the group definition should encompass legal entities and unincorporated legal entities. If a group definition were to be introduced in the current framework, it should also include permanent establishments.

The introduction of a minimum holding period for a group concept for treaty purposes, so as to prevent abuse, is not required. As soon as the group definition is met, the entity is considered a group entity. As soon as the group definition is no longer met, there should no longer be a group for treaty purposes. This would require a continuous assessment, which is inherent to viewing the single integrated entity as a group.

The elements discussed in relation to a group definition can be summarized as follows: