Tax Treaty Override and the Need for Coordination between Legal Systems: Safeguarding the Effectiveness of International Law

Treaty override, which generally concerns international law, has a specific connotation with regard to international tax law. The specific connotation of tax treaty override essentially depends on the structure and functioning of the OECD Model on which tax treaties are commonly based. Thus, a study of tax treaty override, regardless of the classification as a monist or dualist system, necessarily involves, on the one hand, an analysis of the relationship between general international law and international tax law and, on the other hand, an analysis of the relationship between international and national law. The first analysis is directed at understanding the structure of tax treaty override and, therefore, at determining the core of the interpretative process which underlies its detection. The examination of the relationship between international and national law is, instead, functional at evaluating the legitimacy (or illegitimacy) of tax treaty override. It is also important to emphasise that nowadays, very often, the relevant relationship is not only between sources of national and international law, but it necessarily involves – as an additional parameter – EU law. This is true not only for the EU Member States, but also for third countries that conclude international treaties with them, and whose rights could easily be affected by a subsequent change to EU law. In this context, treaty override is the most damaging manifestation of lack of effectiveness of international law, which means lack of legal protection for economic operators – and therefore taxpayers – acting globally. For this reason, the resolution of the issues concerning tax treaty override represents an important step towards a necessary consolidation of the relationship between national, international and EU law. This consolidation will guarantee more certainty of law.