Found in Translation: The Correct Interpretation of 'Secret Formula or Process' in India's Tax Treaties
(2016) 4 British Tax Review 411-415
6 Pages Posted: 11 Nov 2016 Last revised: 17 Aug 2017
Date Written: November 9, 2016
This article critically reviews of the Delhi High Court in Director of Income Tax v New Skies Satellite BV to interpreting the phrase "secret formula or process" in the India-Netherlands Tax Treaty 1989. It argues that the court's sole reliance on the English version of the text of the tax treaty (which was also concluded in Dutch and Hindi, lead it along the incorrect interpretative process. Whilst the court does arrive at the correct outcome, the author argues, it does so for the wrong reasons; and the process would have been simplified had the Dutch version of the tax treaty or French text of the OECD Model Tax Convention been referred to.
Keywords: tax treaties, OECD Model Tax Convention, Royalties, secret formula or process, interpretation, legal methodology, multilingual treaties, Vienna Convention on the Law of Treaties
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