Tax Treaty Case Law around the Globe 2022

16.1. Introduction

Bilateral tax treaties developed as a means of relieving double taxation grew in the western world in the 19th and 20th centuries and gradually spread throughout the world resulting in more than 3,000 such treaties so far. By its very nature, bilateral tax treaties are based on the negotiating powers of the parties concerned. These treaties are supposed to be the compromise that has been reached on the basis of an informed choice by the negotiating parties based on their respective economic positions. The negotiating powers of the parties concerned are most often not matched with the result that the dominant economic powers are often able to dictate the terms of such treaties. OECD member countries are supposed to follow the OECD Model that anyways favours the taxing rights of the capital exporting countries. Much has already been written on that subject and the inability of the extant system to cope with the current challenges of dealing with the modern realities. But even while following the OECD Model, tax treaties between OECD member countries and developing countries often differ from the Model and new innovations are introduced to safeguard the interests of ...