Solving conflicts of qualification by analogous application of tax treaties

This article deals with the interpretation of tax treaties in respect of conflicts of qualification. The article shows that there are many situations that are not covered by the wording of tax treaties. In these situations, tax treaties cannot be applied directly, but they should, if possible, be applied by analogy. Qualification conflicts also exist where tax treaties are directly applicable. In these cases, differences in the treaty application which result from a qualification conflict could and should be prevented by a subject-to-tax clause. The author thus favours a new dogmatic approach to the interpretation of tax treaties. This approach leads to taxation that is similar to the taxation that follows from the principles of treaty interpretation in the 1999 OECD Partnership Report. The theoretical and dogmatic background of this approach, however, differs considerably from the OECD's interpretation. The author illustrates the problem based on the taxation of partnerships.