Maria Hilling

The Use of OECD Commentaries as Interpretative Aids: The Static/Ambulatory Approaches Debate Considered from the Perspective of International Law

Since many years, international tax law experts debate the relevance of changes to OECD Commentaries for the purpose of the interpretation of previously concluded tax treaties. Although, generally, most experts seem averse to the idea of an ambulatory approach to the usage of OECD Commentaries, they are reluctant to exclude this idea altogether. Such a position raises an important issue of justification: When exactly should the ambulatory approach be taken? As argued in this essay, the proper answer to this question depends on the particular rule of interpretation justifying the usage of OECD Commentaries in particular cases. If Commentaries are used according to Article 32 of the VCLT as part of the circumstances of the conclusion of a tax treaty, then because of the very nature of this means of interpretation, a static approach would have to be taken. If, instead, Commentaries are used to determine the ordinary meaning of the terms of a tax treaty, or its object and purpose; or if Commentaries are used based on Article 31, paragraph 3(b) of the VCLT; then the VCLT confers on interpreters a discretion. This discretion is limited by the principle of good faith, which means that interpreters will have to continue searching for the intention of treaty parties. Although this search can be rationalized as the application of general factors, as argued in this article, no choices between a static or an ambulatory approach can be made other than relative to particular cases, based on an overall assessment taking all applicable factors into account. Readers should contrast this conclusion with the position of many international tax law experts, who argue that such choices can be dealt with conclusively by the adoption of some or other general principle.