Sunt Pacta Servanda? The Problem of Tax Treaty Overrides

22 Pages Posted: 23 May 2022 Last revised: 27 Jul 2022

Date Written: May 2, 2022


Under Article 26 of the Vienna Convention on the Law of Treaties, 1969, pacta sunt servanda is defined as: “[e]very treaty in force is binding upon the parties to it and must be performed by them in good faith”. Article 27 of this Convention (“Internal law and observance of treaties”) provides that “[a] party may not invoke the provisions of its internal law as justification for its failure to perform a treaty.” However, even though the US recognises the VCLT as binding customary international law (CIL), it has long persisted in overriding tax treaties by domestic legislation, because the US Supreme Court has held that under the US Constitution a later statute can override an earlier treaty. This US position has been roundly condemned , for example, by the OECD. But in recent years, more countries have decided that they can in fact override tax treaties, including countries that generally treat international law as superior to domestic law (for example, Germany) as well as countries that do not (for example,Australia). This development raises doubts as to whether the VCLT position can still be considered as CIL. In the meantime, ironically, since 2001 the US has found itself unable to override tax treaties explicitly because of a combination of partisan polarisation and its unique parliamentary procedures.

Keywords: Treaty overrides

JEL Classification: H26

Suggested Citation

Avi-Yonah, Reuven S., Sunt Pacta Servanda? The Problem of Tax Treaty Overrides (May 2, 2022). U of Michigan Public Law Research Paper No. 22-022, Available at SSRN: or

Reuven S. Avi-Yonah (Contact Author)

University of Michigan Law School ( email )

625 South State Street
Ann Arbor, MI 48109-1215
United States
734-647-4033 (Phone)

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