Preventing Unacceptable Tax Treaty Overrides

British Tax Review, Number 1, 2022 pp 38-63

27 Pages Posted: 14 Jun 2022

See all articles by Craig Elliffe

Craig Elliffe

University of Auckland - Faculty of Law

Date Written: June 1, 2022


Tax treaty overrides are improper, and something should be done about it. This was the conclusion and the recommendation of the Council of the Organisation for Economic Co-operation and Development (OECD) in 1989. Despite this pronouncement against tax treaty override, countries that could override their treaties have continued to do so. Preventing tax treaty overrides seems impossible in some countries because it involves constitutional matters that go to the heart of a country’s sovereignty. The interaction between international law and domestic law is complex for quite a few different reasons. One of them, highlighted in this article, is that there are systemic variances in the way in which jurisdictions adopt treaties into their law and make them legally effective. This can create heterogeneous outcomes between monist and dualist countries. A feature of tax treaties, however, is the integration that they have with domestic law.

This article explores solutions to the tax treaty override problem in respect of those countries, commonly known as dualist states under international legal theory, that are able to legally override their treaties. The suggestion is that the solution lies, not in the pronouncements of international bodies or international agreements themselves, but in the hands of the judiciary. It is suggested that common law and other dualist countries consider the approach of judges in monist jurisdictions (such as the Dutch Supreme Court) and apply an interpretation that coordinates domestic law with binding international obligations. Such an approach would be in accordance with the good faith obligations entered into by countries and would preserve the rule of law. It would also preserve the integrity and certainty of international tax agreements.

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 Preventing Unacceptable Tax Treaty Overrides, Number 1, 2022 pp 38-63 and is reproduced by agreement with the publishers.

Keywords: tax treaties, overrides, monist, dualist, good faith, treaty interpretation

JEL Classification: K34,K33

Suggested Citation

Elliffe, Craig Macfarlane, Preventing Unacceptable Tax Treaty Overrides (June 1, 2022). British Tax Review, Number 1, 2022 pp 38-63, Available at SSRN:

Craig Macfarlane Elliffe (Contact Author)

University of Auckland - Faculty of Law ( email )

Private Bag 92019
Auckland Mail Centre
Auckland, 1142
New Zealand

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