Tax Treaty Case Law around the Globe 2023

1. Introduction

In decision no. 36679 of 14 December 2022, the Italian Supreme Court (Corte di Cassazione) confirmed that, subject to certain conditions, later versions of the Commentary can be used to interpret provisions of older double tax treaties. This is broadly in line with the OECD according to which existing double tax treaties should be, as far as possible, interpreted in the spirit of the revised Commentaries. Changes to the Commentary that derive from amendments to the OECD Model Convention are not relevant to the interpretation of previously concluded double tax treaties if the provisions of those treaties are substantially different from the amended provisions of the OECD Model. However, other changes in the Commentary are generally applicable to the interpretation of double tax treaties signed before their adoption because they reflect the consensus of the OECD Member States as to the proper interpretation of existing provisions. In line with the OECD’s view, the Supreme Court adopted the “dynamic” approach in the interpretation of Article 5, paragraph 4 of the Italy-Switzerland Income Tax Treaty (1976), however, it excluded those changes to the Commentary in relation...