International Tax and Tax Treaty Conflicts

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Transcription:

International Tax and Tax Treaty Conflicts Prof. Dr. Dr. h.c. Michael Lang Institute for Austrian and International Tax Law, WU Vienna (Austria) Institute for Austrian and International Tax Law www.wu.ac.at/taxlaw 1

Framework of tax treaties Tax treaties in the legal system: International treaties under public law Part of domestic law Application of tax treaties: Applied by (national) tax authorities and (national) courts No world tax court No uniformity in interpretation and application Institute for Austrian and International Tax Law www.wu.ac.at/taxlaw 2

How to achieve uniform interpretation Mutual agreement procedures Lengthy procedure No participation of taxpayers Intransparent procedure ( horse-trading?) No publication of results No guarantee that there is agreement at the end Institute for Austrian and International Tax Law www.wu.ac.at/taxlaw 3

How to achieve uniform interpretation Arbitration Loss of sovereignty? Sovereignty lost by conclusion of treaty Other areas, e.g. investment protection Preventive effect Face saving OECD Model Convention: Implementation in bilateral tax treaties? Baseball arbitration? Publication? Institute for Austrian and International Tax Law www.wu.ac.at/taxlaw 4

How to achieve uniform interpretation Alternatives (Non-Binding) Opinion of independent experts International organizations could provide lists for both parties to choose International courts (e.g. ECJ) Example: Tax treaty between Austria and Germany Institute for Austrian and International Tax Law www.wu.ac.at/taxlaw 5

How to avoid qualification conflicts (OECD approach) Art 23 OECD Model Convention OECD Partnership Report: Residence state should follow qualification of state in source Phrase may be taxed in the other contracting state does not provide any legal basis for dependence on actual tax treatment in the other contracting state OECD approach: only when domestic law is relevant (Art 3 par 2 OECD Model Convention) Policy versus interpretation Right Policy? Invitation for state of source to expand taxation right Institute for Austrian and International Tax Law www.wu.ac.at/taxlaw 6

How to avoid qualification conflicts OECD-Commentaries Clarifying controversial issues by amending the OECD Commentaries? OECD Commentaries can only be relevant for tax treaties concluded after the publication of a new version of the OECD Commentaries (travaux preparatoires) No legal relevance of OECD Commentaries for previously concluded tax treaties Convincing force Institute for Austrian and International Tax Law www.wu.ac.at/taxlaw 7

How to avoid qualification conflicts Interpretation rules Art 3 par 2 OECD Model Convention Reference to domestic law versus emphasising the context Misleading rule Link to Art 23 OECD Model Convention Art 6 par 2 OECD Model Convention Institute for Austrian and International Tax Law www.wu.ac.at/taxlaw 8

How to avoid qualification conflicts Taking into account foreign court judgments No binding effect Explaining why a court follows or does not follow foreign decision Availability of foreign decisions Institute for Austrian and International Tax Law www.wu.ac.at/taxlaw 9

Conclusions Solutions: Arbitration Clauses Expert opinions Emphasis on autonomous interpretations of treaty (context of treaty) Institute for Austrian and International Tax Law www.wu.ac.at/taxlaw 10

INSTITUTE FOR AUSTRIAN AND INTERNATIONAL TAX LAW Welthandelsplatz 1, 1020 Vienna, Austria UNIV.PROF. DR. DR. H.C. MICHAEL LANG T +43-1-313 36-4182 michael.lang@wu.ac.at www.wu.ac.at/taxlaw Institute for Austrian and International Tax Law www.wu.ac.at/taxlaw 11