Reference : A Multilateral Interpretation of the Multilateral Instrument (and Covered Tax Agreements)?
Scientific journals : Article
Law, criminology & political science : Tax law
Law / European Law
A Multilateral Interpretation of the Multilateral Instrument (and Covered Tax Agreements)?
Haslehner, Werner mailto [University of Luxembourg > Faculty of Law, Economics and Finance (FDEF) > Law Research Unit >]
Bulletin for International Taxation
[en] Treaty interpretation ; Multilateral instrument ; multilateral interpretation ; Tax treaties ; International tax law
[en] The analysis of the multilateral nature of the interpretation processes created by the MLI shows that very little “true multilateralism” arises from its adoption. At its core, the international tax system remains fragmented and built on bilateral agreements, with only a thin overlay of multilateral agreement on selected issues. The MLI does not set up a multilateral dispute resolution mechanism. The Conference of the Parties as the only true multilateral body created by the MLI plays a very small – if any – role in the interpretation and application of tax treaty rules. Neither has the MLI produced a system where national courts would have a stronger basis to enforce the harmonious interpretation of treaty terms in both contracting states (let alone among all Parties to the MLI) beyond the general appeal of such approach that already exists prior to – and outside the scope of – the MLI. If a coherent interpretation of CTAs with a view to achieve something like the elusive “single tax principle” was indeed a goal behind the project as a whole, the rules on interpretation applicable following the MLI’s adoption do not amount to a codification of that ideal, although the MLI can, in specific circumstances, have an interpretative effect on tax treaties even where it does not result in a modification of the norms in that treaty. Decision harmony among courts in different countries, therefore, remains an ideal that cannot be based in substance on the existence of the MLI.
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