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Income from invested capital and from making assets available for the use by others is covered by Article 10-12 OECD and UN MC: Dividends (Article 10); interest (Article 11) and royalties (Article 12). These provisions cover the allocation of tax jurisdiction of income received by both private individuals and enterprises. With regard to dividends, the standard of both MCs is that the tax jurisdiction is shared. The State of source has been granted a limited tax jurisdiction. Its taxation is credited by the recipient's State of residence, even when it otherwise applies the exemption method (Article 23A(2) OECD and UN MC). Shared taxation in connection with an ordinary tax credit is also the system applied to interest under the OECD and UN MC, and to royalties under the UN MC. However, under the OECD MC, tax jurisdiction in respect of royalties is exclusively allocated to the recipient's State of residence. Tax sharing is a typical compromise to settle a clash between the State of source and the State of residence in cases in which both believe that they have justified claims to tax jurisdiction that they do not want to forgo completely. This is especially true in respect of dividends, interest and/or royalties. On the one hand, the State of residence may put forward as justification that the invested capital or the assets allowed to be used emanate from its national wealth. On the other hand, the State of source may emphasize that the income is produced by means of its infrastructure, labour force, etc. These conflicting interests emerge especially in the relationship between typical capital-exporting States, like most of the OECD member countries, and typical capital-importing States, like developing countries. From a budget perspective, there is a real need for capital-importing States to impose and collect taxes on dividends, interest and royalties received by non-residents (see, e.g., no. 8 UN MC 2011 Comm. on Article 10). The 1971 Andean Model deviates from the OECD and UN MC. It exclusively allocates tax jurisdiction on dividends, interest and royalties to the State of source. The UN MC did not adopt this approach; however, it has some flavour of it because it leaves open the maximum rates at which the State of source may tax dividends, interest and royalties. Developing States pleaded for exclusive taxation by the source State (see, e.g., no. 8 UN MC 2011 Comm. on Article 10; no. 9 UN MC 2011 Comm. on Article 11 no. 9 UN MC 2011 Comm. on Article 12). Consensus could not be reached. No winner of the ‘battle of distribution’ between the State of source and the State of residence can be designated. The battle is only transferred to another level. With regard to other items of income, tax jurisdiction is allocated to one Contracting State exclusively or primarily. They may be taxed at full domestic tax rates of the State concerned. Here, tax sharing is not the applied policy, neither in the MCs nor in tax treaty practice. The major drawback of tax sharing is the transfer of tax benefits granted to investors by the State of source to the State of residence as a result of crediting the State of source's tax. Even the UN MC does not provide for a solution of this disadvantage. As a consequence, capital-importing States do not have the opportunity to stimulate economic policies by means of tax incentives in the context of dividends, interest and royalties. A tax sparing credit or a matching credit can remove this drawback. In their DTCs with developing States and subject to certain conditions, European countries, Canada, and Japan have included such credits. The US does not adopt this approach. Currently, the prevailing view under OECD member countries is that tax incentives are not an efficient and effective way to attract foreign direct investments. They will allow tax sparing credits only with respect to certain identified incentives or activities, and will limit in time the application of the tax sparing provisions). Another solution to this drawback would have been the adoption of the solution suggested by Georg von Schanz. In 1892, he suggested a tax sharing at a tax base level and not at the level of the amount of taxes. His proposal was that, e.g., three quarters – or some other part – of the foreign source income would be allocated to the State of source and taxed on the basis this State's domestic tax law. The other quarter – or another counterbalance as the case may be – would be allocated to the State of residence. Von Schanz's suggestion was only applied once: Article 15 of the 1939 DTC between France and the US. The structure and the wording of some parts of Articles 10-12 are rather similar. These provisions therefore have a number of common interpretation issues. This chapter discusses four of these common issues: The terms ‘paid to’ and ‘beneficial owner’; the ‘permanent establishment proviso’ and the procedures for reducing tax at source. An outlook to the future is the final section of this chapter.