Tax Treaty Override: A Jurisdictional Approach

Abstract

Despite the recent developments grounded on constitutional arguments, the current country-by-country approaches to treaty override still fail to qualify the overriding as an unacceptable attempt to extend taxation beyond the limits agreed with treaty partners. Accordingly, treaty override has been seen as a problem the solution of which would depend on each country's view on the role of international law. This article suggests that such failure is due to limitations inherent to this misleading reasoning with respect to the relation between domestic legislation and international law. After describing the main approaches to treaty override, the author proposes that treaty override must be addressed as an issue of jurisdiction, instead of a matter of hierarchy. The proposed approach is consistent with the actual purpose of double tax conventions and with the need to preserve the jurisdictional limitations agreed under tax treaties.