Fowler v HMRC (UK Supreme Court): Neither Fish nor Fowler: Tax Treaty Implications of Domestic Deeming Rules

(2020) British Tax Review, no.4, 537-547

12 Pages Posted: 30 Nov 2020

See all articles by Angelo Nikolakakis

Angelo Nikolakakis

Ernst & Young

Peter Blessing

KPMG Washington National Tax Practice

Guglielmo Maisto

Catholic University of the Sacred Heart of Milan - Catholic University of the Sacred Heart of Piacenza

Johann Hattingh

University of Cape Town (UCT) - Faculty of Law

John Avery Jones

London School of Economics & Political Science (LSE) - London School of Economics

Date Written: November 18, 2020

Abstract

This case note deals with the UK Supreme Court decision in Fowler v HMRC [2020] UKSC 22; [2020] STC 1476. The authors explain why the decision illustrates that domestic law deeming rules may in certain cases neither affect the meaning or interpretation of a term, nor the legal qualification of facts, but rather fall into yet a third category for the purposes of applying a tax treaty. The Supreme Court's decision is critically assessed on the basis of three core propositions put forward by the Court: (1) Nothing in the Treaty required its business profits or employment income articles to be applied to the fictional, deemed world which may be created by UK income tax legislation; (2) It is required to determine for what purposes and between whom is a fiction created, and whether it is for the purpose of rendering a person immune from tax in the UK, or adjudicating between the Contracting States as the potential recipient of tax; and (3) To apply such a deeming provision so as to alter the meaning of terms in the Treaty with the result of rendering a taxpayer immune from UK taxation would produce an anomalous result, and would be contrary to the purposes of the Treaty.

Note: This material was first published by Thomson Reuters, trading as Sweet & Maxwell, 5 Canada Square, Canary Wharf, London, E14 5AQ, in the British Tax Review as 'Fowler v HMRC (Supreme Court): Neither Fish nor Fowler: Tax Treaty Implications of Domestic Deeming Rules', British Tax Review Issue 4, 2020 and is reproduced by agreement with the publishers.

Keywords: Statutory Deeming; Tax Treaty Interpretation; Relationship Between Domestic and International Law; Double Non-Taxation

JEL Classification: K00, K33, K34, K40

Suggested Citation

Nikolakakis, Angelo and Blessing, Peter and Maisto, Guglielmo and Hattingh, Johann and Avery Jones, John, Fowler v HMRC (UK Supreme Court): Neither Fish nor Fowler: Tax Treaty Implications of Domestic Deeming Rules (November 18, 2020). (2020) British Tax Review, no.4, 537-547, Available at SSRN: https://ssrn.com/abstract=3733058

Angelo Nikolakakis

Ernst & Young ( email )

P.O. Box 4500
Station B
Montreal, Quebec H3B 5J3
Canada

Peter Blessing

KPMG Washington National Tax Practice ( email )

1801 K Street NW
Ste 12000
Washington, DC 20006
United States

Guglielmo Maisto

Catholic University of the Sacred Heart of Milan - Catholic University of the Sacred Heart of Piacenza ( email )

Via Emilia Parmense, 84
Piacenza
Italy

Johann Hattingh (Contact Author)

University of Cape Town (UCT) - Faculty of Law ( email )

Private Bag
Rondebosch 7701
South Africa

HOME PAGE: http://www.tax.uct.ac.za/aprof-johann-hattingh

John Avery Jones

London School of Economics & Political Science (LSE) - London School of Economics ( email )

United Kingdom

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