Access to Treaty Benefits

S. 41. Introduction

The role that Preambles have played with respect to treaty interpretation and treaty entitlement has not been an undisputed issue to date, particularly in the tax field. Perhaps due to its lack of substantive content or ambiguous language, its practical application has not been uniform. Furthermore, its relevance and particular objective remains an ongoing discussion both for scholars and courts. For the purposes of this chapter, the author understands, in general, that the Preamble of a treaty “consists of a set of recitals which commonly include the motivations, aims and considerations of the Contracting States and the affirmation of the shared values which have played a part in the conclusion of the treaty.”

Prior to the OECD Base Erosion and Profit Shifting Action Plan (“BEPS”), in the view of the International Fiscal Association (“IFA”), the purpose of most Double Tax Conventions (“DTC”) expressed in the Preamble was to avoid double taxation and prevent fiscal evasion, or just to avoid double taxation. In other cases, the purpose of a pre-BEPS DTC considered the enhancement of economic cooperation. In contrast, only a few pre-BEPS DTCs referred to preventing tax ...