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


Art. 17 § 1 provides that notwithstanding the provisions of Art. 15, income derived by a resident of a CS as an entertainer, such as a theatre, motion picture, radio or television artiste, or a musician, or as a sportsperson, from that resident’s personal activities as exercised in the other CS, may be taxed in that other State. The Commentary to Art. 17 § 1 focuses on five main issues: the allocation rule established by Art. 17; the definition of entertainers and sportspersons; the situations in which income is paid indirectly to an individual entertainer or sportsperson; the various types of compensation that may overlap with those covered by Art. 17 § 1; and the relationship between Art. 17 and other treaty articles. Art. 17 § 1 provides that entertainers and sportspersons who are residents of a CS may be taxed in the other CS in which their personal activities as such are performed, whether these are of a business or employment nature. So Art. 17 § 1 essentially constitutes an exception to Artt. 7 and 15 § 2 as it allows concurrent taxation in both the RC and the SC, while those articles provide for exclusive taxation in the RC, if certain requirements are met. The Commentary notes that where, in the cases dealt with in Art. 17 § 1 and 2, the exemption method for relieving double taxation is used by the RC of the person receiving the income, that State would be precluded from taxing that

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