The Use of the OECD Commentary
Elgar Tax Law and Practice series
Chapter 13: NON-DISCRIMINATION (ART. 24)
The principle adopted by Art. 24 is that discrimination on the grounds of nationality is forbidden: nationals of the RC may not be treated less favourably, i.e. a ‘more burdensome’ tax treatment cannot be imposed in the SC on nationals of the RC if they are in the ‘same circumstances’. This principle is typically applied in inbound situations, in which it protects nationals vs non-nationals in the SC. For example, in a Spanish case, Spain applied a limitation period for the refund of withholding tax on non-residents that differed from the limitation period for residents. The Court held that this was in conflict with the non-discrimination article. By contrast, when the non-discrimination principle is applied in outbound situations it protects nationals of the RC operating in the RC versus nationals of the RC operating in the SC. There is a rather limited judicial application of this outbound non-discrimination, except for cases that attribute to PEs of foreign companies with foreign income (treated as notionally resident of the SC) the same benefits enjoyed by companies resident of the same country of the PEs and having foreign income. For details see infra at 13.84–13.92. The principle of non-discrimination of Art. 24 is not meant to have the far-reaching application afforded by other clauses of equal treatment found in international law (MFN clause in theWTO) or in EU law (Art. 18 of the EU Treaty), so the essential feature of this treaty clause is what it does not achieve,
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