Judicial Interpretation of Tax Treaties

Judicial Interpretation of Tax Treaties

The Use of the OECD Commentary

Elgar Tax Law and Practice series

Carlo Garbarino

Judicial Interpretation of Tax Treaties is a detailed analytical guide to the interpretation of tax treaties at the national level. The book focuses on how domestic courts interpret and apply the OECD Commentary to OECD Model Tax Convention on Income and on Capital. Adopting a global perspective, the book gives a systematic presentation of the main interpretive proposals put forward by the OECD Commentary, and analyses selected cases decided in domestic tax systems in order to assess whether and how such solutions are adopted through national judicial process, and indeed which of these are of most practical value. The book operates on two levels: firstly it sets out a clear and comprehensive framework of tax treaty law, which will be an important tool for any tax practitioner. Secondly, the book provides crucial guidance on issues of tax treaty law as applied at domestic level, such as investment or business income, dispute resolution and administrative cooperation.


Carlo Garbarino

Subjects: law - academic, tax law and fiscal policy


The treaty’s personal scope of application is to relieve double taxation from double residence, not only double taxation from taxation in the RC and in the SC, and therefore Art. 4 defines the meaning of the term ‘resident of a CS’ and solves cases of double residence which may be created by the domestic laws of States which impose ‘full tax liability’ based on the taxpayers’ personal attachment to the RC. In respect to individuals the definition of a resident covers various forms of personal attachment to a State. According to Art. 4 § 1 the term ‘resident of a CS’ includes any person who, under the laws of that State, is liable to tax therein by reason of his domicile, residence, place of management or any other criterion of a similar nature, as well as government of each State or political subdivision or local authority thereof. Art. 4 § 2 however, provides that the term ‘resident of a CS’, does not include any person who is liable to tax in RC in respect only of income from sources in the RC or capital situated therein. Pension funds, charities and other organizations may be exempted from tax, only if they meet all of the requirements for exemption specified in domestic laws. National Courts have addressed situations in which the issue was whether a taxpayer was effectively liable to tax and therefore entitled to the benefits of the treaty. For example, in TD Securities, a Canadian case, US-Par, a company

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