Tax Treaty Case Law around the Globe 2021
1. Aufl. 2022
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S. 92I. Introduction
This is a decision of the First Tier Tribunal (Tax Chamber), the lowest level of tax tribunal in the United Kingdom. The case is going on appeal to the Upper Tribunal in December 2021 so perhaps one should not spend too long examining this decision. The decision of the Upper Tribunal (and any onward appeal from there) may be considered in later years’ conferences.
The case has essentially two international tax issues in it; one of them relates to the interpretation of Article 6 of the Canada-United Kingdom Double Taxation Convention of (the Convention) and the meaning of “Immovable Property” – in this case, relating to payments linked to the extraction of mineral deposits (i.e. oil) from the British sector of the North Sea. There is also a subsidiary question on treaty interpretation when the treaty is concluded in two languages.
II. Facts of the Case
The facts appear complicated; actually, they are relatively simple.
Back in the 1980s, the Royal Bank of Canada (RBC), a Canadian company, made a loan to a Canadian company, Sulpetro, in order to fund extraction of oil activities in the North Sea. Sulpetro had a UK company as a subsidiary (SUKL) that acquir...