In 1995, the OECD amended the text of Article 3, paragraph 2, to include the phrase “at the time.” As explained in paragraph 11 of the section 3 commentary, paragraph 2, this amendment explicitly promoted the definition of terms that are not defined in the DBA under the act “in force in the application of the convention, i.e. the collection of taxes.” That is how the amendment approved the ambulatory approach. The OECD itself is essentially in favour of the so-called ambulatory approach to this area, i.e. the most recent version of a given source of interpretation is required. In particular, paragraphs 33 to 36.1 of the introduction of the model contract and the comments encourage both tax authorities and taxpayers to consider the most recent version of the OECD model and its comments as a relevant point of analysis in the interpretation of contracts. On the other hand, the OECD opposes the contrary interpretation of the new articles of the OECD model and their comments, arguing that the amendments cannot give rise to principles other than previous versions, but can only be further clarifications that do not significantly alter the importance of the previous text. For example, the Supreme Court of Finland referred to subsequent comments on the definition of royalties, since the earlier commentary of 1977 did not include any software in the definition of royalties. [15] The Court then followed the subsequent comment. In the end, tax authorities and taxpayers should approach with caution comments that were made before (or at the same time) the adoption of a particular contract.

You should also recognize that comments made or amended after a contract is adopted appear to be more problematic. The safest option, as Jones advises, is to “read the corresponding comment, and then decide, in light of its content, what weight should help it.” [30] In particular, the interpretation of tax and double taxation conventions is an essential but controversial part of the international tax arena. This article examines the difficulties encountered in the use of specific interpretive instruments to determine the importance of the language at issue in the tax treaty and examines whether these difficulties should affect the weight of these sources. Jurisdictional conflicts can also be resolved through the mutual unification procedure under Article 25, paragraph 3 of the current OECD model.