The use of the OECD Model Tax Convention as an inrpretative aid : the static vs ambulatory approach debate considered from a South African perspective
CITATION: Steenkamp, L. 2017. The use of the OECD Model Tax Convention as an inrpretative aid : the static vs ambulatory approach debate considered from a South African perspective. Journal of Economic and Financial Sciences, 10(2):195-205, doi:10.4102/jef.v10i2.13.
The original publication is available at https://jefjournal.org.za/
Most tax treaties (including South Africa’s) are based on the OECD Model Tax Convention on Income and Capital and the related Commentary (the ‘OECD Model’). Notwithstanding the uncertainty surrounding its legal status, the courts in many countries use the Commentary in the interpretation of treaties. This article aims to contribute to the debate regarding the use of a static or ambulatory approach when using the OECD Model Commentary. If a double tax agreement (DTA) is based on the OECD Model and a certain provision follows the wording of the OECD Model, it could be contended that the contracting states intended such a provision to have the meaning it has in the OECD Model. However, the interpretation of revisions made to the OECD Model and Commentary subsequent to the conclusion of a DTA remains contentious, as scholars appear to be divided between an ambulatory and a static approach. A four step approach is recommended when considering the application of the Commentary.