Contribution to collective works (Parts of books)
The Effect of a Tax Treaty Tie-breaker for Dual Residents
Haslehner, Werner
2016In Lang, Michael; Owens, Jeffrey; Pistone, Pasquale et al. (Eds.) Tax Treaty Case Law around the Globe 2015
 

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Keywords :
tax treaties; tie breaker; dual residents
Abstract :
[en] Case 33872C, which was decided by Luxembourg’s Cour administrative on 18 December 2014, concerned two questions of tax treaty law: first, whether the taxpayer in question was a resident of Luxembourg or Germany during the tax period concerned in accordance with the tie-breaker rule of the applicable double taxation convention (DTC); and second, what was the effect of that qualification for the application of domestic tax law provisions in Luxembourg that do not affect Germany’s taxing right as guaranteed in the DTC. Does the tie-breaker rule in Article 4(1) of the OECD Model determine how a dual-resident taxpayer is to be treated under domestic law or does it merely serve to allocate the role of residence country and source country, respectively? The court answered this question in the negative, holding that the taxpayer was a resident of Germany under the tax treaty tie-breaker rule, but that the tax treaty did not prevent Luxembourg from treating him (a non-resident under the terms of the tax treaty) as a resident to the extent that doing so did not violate Germany’s primary taxing right, which resulted in (progressive) joint taxation with his spouse in Luxembourg. The court's reasoning is sound based on general principles of the relationship between domestic law and tax treaties, but did not address more intricate arguments that arise from the concrete wording of the treaty. This contribution explores these in addition to analysing the court's decision.
Disciplines :
Tax law
Author, co-author :
Haslehner, Werner  ;  University of Luxembourg > Faculty of Law, Economics and Finance (FDEF) > Law Research Unit
External co-authors :
no
Language :
English
Title :
The Effect of a Tax Treaty Tie-breaker for Dual Residents
Publication date :
2016
Main work title :
Tax Treaty Case Law around the Globe 2015
Editor :
Lang, Michael
Owens, Jeffrey
Pistone, Pasquale
Rust, Alexander
Schuch, Joseph
Staringer, Claus
Storck, Alfred
Essers, Peter
Kemmeren, Eric
Smit, Daniël
Publisher :
IBFD, Vienna, Unknown/unspecified
Linde, Vienna, Unknown/unspecified
ISBN/EAN :
978-90-8722-351-9
Pages :
43-50
Available on ORBilu :
since 02 January 2016

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