Interpretation of Tax Treaties under International Law

Transcription

1 Interpretation of Tax Treaties under International Law A study of Articles 31, 32 and 33 of the Vienna Convention on the Law of Treaties and their application to tax treaties Franciscus Antonius Engelen Thesis submitted to Erasmus University Rotterdam in fulfilment of the requirements for the degree of Doctor of Law Degree awarded on 2 December 2004 Volume 7, Doctoral Series International Bureau of Fiscal Documentation Academic Council

2 TABLE OF CONTENTS Preface List of abbreviations vii xxi PART I INTRODUCTION Chapter Scope and purpose of this study Structure 4 Chapter 2 Sources of public international law Custom Treaties The constitutive elements State practice Evidence Duration Uniformity and consistency Generality Opinio juris Custom v. usage Evidence Dissenting States Special custom Nomenclature Doctrine The intention of the parties Treaty forms No formal requirements 25 7

3 Formal treaties Treaties in simplified form Dynamics of the relationship between treaties and custom General principles of law Hierarchy between the sources 35 PART II MYTHS AND REALITIES OF ARTICLES 31, 32 AND 33 OF THE VIENNA CONVENTION Chapter 3 The Vienna Convention on the Law of Treaties History Functional and temporal scope Functional scope Temporal scope General principle of non-retroactivity The dynamics of the relation between the Vienna Convention and customary international law The rules on treaty interpretation 54 Chapter 4 History of Articles 31,32 and 33 of the Vienna Convention Travaux preparatories Third Report on the Law of Treaties Sixteenth session of the ILC Sixth Report on the Law of Treaties Eighteenth session of the ILC United Nations Conference on the Law of Treaties 74

4 4.3 Legal status of the preparatory work of the ILC 78 Chapter 5 The textual approach to treaty interpretation Perspective of the ILC Perspective of governments and international organisations Comments and observations on the 1964 Draft United Nations Conference on the Law of Treaties Comments and observations submitted in advance of the Conference The debate in the Committee of the Whole 92 Chapter 6 The general rule of interpretation Integration approach Comments and observations on the 1964 Draft Sixth Report on the Law of Treaties Eighteenth session of the ILC United Nations Conference on the Law of Treaties Evaluation Good faith The moral content of the legal principle of good faith Good faith in the law of treaties The Vienna Convention on the Law of Treaties Pacta sunt servanda 125 Xlll

5 The doctrine of abuse of rights Estoppel, acquiescence and the protection of legitimate expectations Good faith in the interpretation of treaties Interpretation as a first step towards application Distinct "rules" of interpretation derived from the principle of good faith Estoppel, acquiescence and the protection of legitimate expectations Ordinary meaning Special. meaning Object Sixth Report on the Law of Treaties Eighteenth session of the ILC Evaluation Third Report on the Law of Treaties Sixteenth session of the ILC Sixth Report on the Law of Treaties Eighteenth session of the ILC United Nations Conference on the Law of Treaties Evaluation and purpose No teleological interpretation Sixth Report on the Law of Treaties Sixteenth session of the ILC Sixth Report on the Law of Treaties Eighteenth session of the ILC Evaluation Principle of effectiveness

6 Third Report on the Law of Treaties Sixteenth session of the ILC Evaluation Context The definition of 'treaty' International agreements embodied in two or more related instruments Evaluation Contemporaneous agreements Non-written agreements Relating to the treaty Made in connection with the conclusion of the treaty Contemporaneous instruments The need for express or implied assent Explanatory memoranda and reports Further authenticz elements of interpretation Subsequent agreements Interpretation v. amendment of treaties Inter se agreements Non-written agreements Subsequent practice The quantitative element of subsequent practice The qualitative element of subsequent practice Relevant rules of international law XV

7 applicable in the relations between the parties Treaties, international custom and general principles of law recognised by civilised nations The inter-temporal law 254 Chapter 7 Supplementary means of interpretation The International Law Commission Third Report on the Law of Treaties Sixteenth session of the ILC Sixth Report on the Law of Treaties Eighteenth session of the ILC United Nations Conference on the Law of Treaties Evaluation 329 Chapter 8 Treaties authenticated in two or more languages Travaux preparatories Third Report on the Law of Treaties Sixteenth session of the ILC Comments and observations on the 1964 Draft Sixth Report on the Law of Treaties Eighteenth session of the ILC United Nations Conference on the Law of Treaties Evaluation Legal status of the different language versions Interpretation of plurilingual treaties 381

8 Comparison of authentic texts Textual divergences Principles and maxims not codified in the Vienna Convention Correction of translation errors 413 Chapter 9 The Vienna Convention system of interpretation 417 Chapter 10 Interpretation of tax treaties under international law The primacy of the text Object and purpose Protocols, memoranda of understanding, exchanges of notes, etc. Mutual agreements Legal status of mutual agreements under international law The interpretative provision The legislative provision Subsequent practice Relevant rules of international law Supplementary means of interpretation The OECD Model Tax Convention and its Commentaries Organisation for Economic Co-operation and Development Recommendations of the OECD Council International law status of the Commentaries Good faith

9 Source of legal obligation? OECD Commentaries v. ILC Commentaries Reference to domestic law for purposes of interpretation The relation between Article 3(2) of the OECD Model Tax Convention and the Vienna Convention The meaning of 'context' in Article 3(2) of the OECD Model Tax Convention The scope of the reference in Article 3(2) of the OECD Model Tax Convention to the domestic laws of the contracting States Both contracting States apply the treaty Legal terms The meaning under domestic laws other than the applicable tax laws The context in which a term is used in domestic law Similar but not identical terms used in domestic law Later changes in domestic law Conflicts of qualification Double non-taxation resulting from a genuine dispute as to the interpretation of the facts or of the provisions of a tax treaty 513 Chapter 11 Interpretation of tax treaties in the national legal order The relationship between national and international law The Dutch constitutional law of treaties Parliamentary approval 520 XVlll

10 Implementing treaty Internal effect Prohibition on judicial review 533 Part IV SUMMARY AND CONCLUSIONS Chapter 12 Summary and conclusions The nature and scope of application of the rules of interpretation laid down in Articles 31, 32 and 33 of the Vienna Convention General rule and supplementary means of interpretation Interpretation of treaties authenticated in two or more languages Interpretation of tax treaties under international law Interpretation of tax treaties in the national legal order 553 Summary and conclusions in Dutch 555 Bibliography 573 Case Law 587