On the cover of this week’s Tax Notes International: A Narrower Lens on Source Taxation at Sea.

The OECD’s November 2025 update to the Model Tax Convention introduces a new, optional time-based permanent establishment test for offshore activities connected with the exploration for and exploitation of natural resources.

In this article, Karl Berlin explores the update and unpacks how the new offshore provision narrows its scope to finite natural resources, excludes renewable energy activities, and draws a line between core activities and auxiliary vessel operations. The article also shows why treaty drafting choices matter: the presence or absence of explicit carve‑outs for auxiliary activities drives materially different tax outcomes.

Read the full article in Tax Notes International here