Tax Treaty Case Law around the Globe 2022

1.1. Introduction

In December 2021, the Dutch Supreme Court rendered an interesting decision on the applicability of article 15(3) of the Netherlands-Switzerland Income Tax Treaty (2010), which is almost identical to article 15(3) of the OECD Model (in the pre-2017 version) on the wages earned by a Dutch resident seaman who worked on board a construction vessel. Although the case handles the applicability of article 15(3), the specific issue dealt with in the court case was the reference in article 15(3) to the definition of “international traffic” in article 3(1)(e) of the OECD Model and whether or not construction vessels could qualify as ships operated in international traffic. The special issue in this particular case was the fact that the construction vessel was not operated yet during the working periods of the Dutch seaman but was still in the construction phase. Therefore, two issues were to be decided by the Dutch tax courts in this case: (i) can construction vessels qualify as ships under article 3(1)(e) of the OECD Model?; and (ii) can a ship that is not in the operational phase but still in its construction phase already qualify as a ship operated in international traffi...