The Effect of Directives Within the Area of Direct Taxation on the Interpretation and Application of Tax Treaties

In recognition of the considerable attention in recent years given to the effect of EU directives on tax treaties, this important book for the first time brings a combined public international law and European Union law perspective to bear on certain directives – primarily the Parent-Subsidiary Directive, the Merger Directive, the Interest and Royalty Directive, and the Anti-Tax Avoidance Directives – and their interaction with tax treaties concluded by EU Member States. In this area of direct international taxation, the author examines the effect of tax treaties on both the interpretation and application of directives in depth.
In clarifying how directives can affect or are allowed to affect, tax treaties, the book provides detailed analyses of such aspects as the following:

- status of directives under public international law, including relevant provisions of the Vienna Convention on the Law of Treaties and the OECD Model Tax Treaty;

- whether national law aimed at implementing a directive may be able to override a tax treaty or may be overridden by such a tax treaty;

- whether the lex posterior and lex specialis conflict rules under public international law are applicable to conflicts between directives and tax treaties;

- the role of directives under the interpretative provision of the Vienna Convention on the Law of Treaties, the OECD Model Tax Treaty and the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting;

- legal basis and application of the duty of consistent interpretation to tax treaties; and

- scope of the primacy of directives with respect to tax treaties.

The book offers insightful and well-informed recommendations aimed at aligning the ‘allowed’ effect under public international law and the ‘required’ effect under the laws of the European Union of the directives on tax treaties, with a view to ensuring that directives affect tax treaties in such a way that tax treaties cannot prevent achievement of the result of a directive. The analysis is based primarily on legal doctrines, literature, and case law of the CJEU, ICJ, and arbitral tribunals.
As a highly informative and closely reasoned guide that offers clear perspectives on resolving any conflict that may arise between a directive and a tax treaty, this book will be of inestimable value for tax practitioners and advisers, judges, policymakers, tax authorities, and academics whose work involves tax treaties concluded by EU Member States.