In SWI No. 11/1998 Michael Lang has heavily criticized the Ministry of Finance; according to his view the Ministry is about to misinterprete the Austrian double taxation conventions. One of his arguments concerns the relationship between domestic tax law and treaty law. According to the Ministry's point of view a 3-stage technique should be used in determining the tax liability in complicated international tax cases:

Stage 1: Exclusive application of domestic law to determine the domestic tax base and tax liability.

Stage 2: Application of treaty law to determine to which extent the treaty permits the tax to be levied.

Stage 3: Again exclusive application of domestic law in order to determine when and how the tax due is to be collected.

It is quite clear that in stage 2 treaty law prevails over domestic law and it remains uncontested that the legal consequences of treaty law cannot be drawn exclusively from the pure wording of the various provisions, but that it is essential to respect the context in which such provisions had been adopted in the convention. Bearing this in mind it can be stated that unless the wording of the convention or the context of the convention provide to the co...