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


Artt. 23A and 23B deal with the so-called juridical double taxation, i.e. that situation in which the same income (or capital) is taxable in the hands of the same person by more than one State. Juridical double taxation is distinguished from economic double taxation, a situation in which two different persons are taxable in respect of the same income (or capital). The Commentary distinguishes three cases of juridical double taxation which are analysed in detail below: a) Dual residence: each CS subjects the same person to tax on his worldwide income or capital (concurrent full liability to tax); b) Residence-source: a person is a resident of a CS (the RC) and derives income from, or owns capital in the other CS (the SC) and both States impose tax on that income or capital (concurrent full liability to tax); c) Source-source: each CS subjects the same person, not being a resident of either CS, to tax on income derived from, or capital owned, in a CS. Case a) is reduced to case b) by virtue of the tie-break rule of Art. 4 because a dual resident person under the domestic laws of the CSs by reason of his domicile, residence, place of management or any other criterion of a similar nature (§ 1 of Art. 4) becomes a resident of either CS as a result of the operation of the criteria of Art. 4 § 2 and 3 (see supra at paras 2.18–2.52 for individuals and paras 2.53–2.70 for companies).

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