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


According to Art. 6 § 1 income derived by a resident of the RC from immovable property (including income from agriculture/forestry) situated in the SC may be taxed in the SC. There is however an alternative model of taxation only in the SC when the treaty rules attribute the exclusive right to tax of the SC, departing from the Model. The immovable (hereafter imm.) property article deals only with income which a resident of a CS derives from immovable property situated in the other CS. It does not, therefore, apply to income from immovable property situated in the CS of which the recipient is a resident or situated in a third country; Art. 21 § 1 applies to such income (see infra at para 11.56). The application of Art. 6 is essentially based on domestic laws of the CSs in particular with respect to how the income from immovable property is actually taxed. Domestic laws are especially applied under the treaties to determine the amount of taxable income from immovable property, which is often assessed as ‘notional income’. For example, X, a resident of Germany, owned immovable property in the Netherlands that was neither used by him nor located to third parties. Special rules in the Netherlands domestic laws applied, providing for taxation of the immovable property on the base of notional income from the own use of immovable property. The Court held that such domestic rules were applicable in so far as they resulted from policies

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