Tax Treaty Case Law around the Globe 2020

S. 113Chapter 11 The Netherlands: Dutch Dividend Withholding Tax and Most-Favoured-Nation Clause under the Netherlands-South Africa Income Tax Treaty

Daniel Smit

11.1. Introduction

This case deals with the Dutch dividend withholding tax and the impact thereon of the most-favoured-nation (MFN) clause under the Netherlands-South Africa Income and Capital Tax Treaty(2005). While MFN clauses are quite common in the field of international trade and investment law, these clauses are a relatively rare phenomenon in the area of international tax law. Without an explicit written clause to that end, no obligation for countries to grant MFN treatment with respect to tax treaties can be derived from international law. Also, the non-discrimination clause under article 24 of the OECD Model Tax Convention cannot be interpreted as requiring MFN treatment. Similarly, from the case law of the Court of Justice of the European Union, it can be inferred that Member States are not obliged under the EU Treaty freedoms to grant taxpayers the right to apply the double tax treaty that is most favourable to them.

From this perspective, the case at hand is an interesting one from an international tax law point of view....