Canons of interpretation relevant to the concept of beneficial ownership (BO)

Abstract

Chapter 2 begins with an identification of relevant legal theories and canons of interpretation for the concept of beneficial ownership (BO), pointing to the superiority of the derivational over the clarificative theory of interpretation. It depicts the relevance of interpretation compatible with constitutional principles for the concept of BO, underscoring the supreme importance of linguistic interpretation as a guarantor of the constitutional principles of the specificity and predictability of tax law. The chapter continues with explaining that the asymmetry in resolving interpretational doubts in favour of taxpayers is a significant derivative of the pro-constitutional canon of interpretation in the area of tax law. The chapter then moves on to discuss the general rule of interpretation of international treaties under Art. 31 of the Vienna Convention on the Law of Treaties (VCLT ), which applies, among other things, to tax treaties and thus to the concept of BO. Next, the chapter devotes attention to a general rule of interpretation of tax treaties under Art. 3(2) of the OECD Model Tax Convention on Income and on Capital (OECD Model) and to the OECD's documentation, which contains an important interpretative guidance regarding the concept of BO. Chapter 2 also focuses on the canon of interpretation leading to results compatible with European Union (EU) law; this is known as the pro-EU interpretation and is of the greatest importance for the understanding of the concept of BO under EU directives. In conclusions, a reader may find the common interpretative denominator relevant for the concept of BO, which is that linguistic interpretation constitutes the starting point and dominates the process of interpretation in line with the Constitution, the VCTL and EU law, in the sense that contextual and purposive interpretation may not alter the clear meaning of a legal norm resulting from the outcome of its linguistic interpretation.