Legislative Tax Treaty Overrides in Austrian, German, and EU Law

Abstract

More than 30 years ago, in 1989, the OECD issued its report on “Tax Treaty Override”. It defined a “treaty override” as a “situation where the domestic legislation of a State overrules provisions of either a single treaty or all treaties hitherto having had effect in that State”, and recommended that States “avoid enacting legislation which is intended to have effects in clear contradiction to international treaty obligations”. The discussion has become quite nuanced and sophisticated in many countries since then. Apart from the political and economic dimension of treaty overrides, the discussion has centred around the potential limits imposed by domestic (constitutional) law and remedies under international law. At the outset, one typically encounters discussions about the “grand” theories concerning the relationship between the international and the national legal order (monist or dualist), but neither theory has normative significance, as it will always be the national legal framework that precisely determines if, how, and at which rank in the hierarchy of norms an international treaty will be incorporated. This article aims at tracing the issue of treaty overrides in two continental European countries, Austria and Germany (Chapter II), as well as in the legal order of the EU (Chapter III), and will draw some general conclusions (Chapter IV).

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 Legislative Tax Treaty Overrides in Austrian, German, and EU Law [2022] B.T.R., No.1 and is reproduced by agreement with the publishers”.