Tax treaty interpretation

Abstract

This thesis analyses which principles should govern the interpretation of tax treaties. This field is complex - because tax treaties have a dual status. Tax treaties are treaties between States - which are governed by public international law, the principles of which have been codified in the 1980 Vienna Convention on the Law of Treaties. Tax treaties are also laws which can affect the domestic rights of taxpayers (and States). Different, and possibly conflicting, principles of interpretation may apply in public international, and in (different) domestic, contexts. This thesis seeks to reconcile these different principles, recognising that tax treaties should be interpreted uniformly. Only if this is done can double taxation (and double non-taxation) be avoided - and reciprocity achieved. This thesis analyses why, and when, the Vienna Convention is relevant in interpreting a tax treaty in a domestic context. It seeks to describe a uniform approach to tax treaty interpretation - which could be applied by domestic courts worldwide. It reaches four main conclusions. Firstly, a textual approach (endorsed as the starting point of interpretation at a public international level by Article 31(1) of the Vienna Convention) should (also) be the starting point of interpretation in a domestic context. Secondly, the proper approach in a domestic context cannot be the mirror image of the Vienna Convention approach. Thirdly, a uniform domestic approach cannot be identical to any one particular State's approach to the interpretation of its domestic tax statutes. Fourthly, a uniform domestic approach should be autonomous - and neutral as between all States. It should recognise a tax treaty's dual status - yet be independent of any interpretative principles which are appropriate only in a purely public international, or a purely domestic, context.