Netherlands: The relevance of (Amended) OECD models and commentaries and the interpretation of the term “employer”

The relevance of (amended) OECD Models and Commentaries in respect of the interpretation of actual tax treaty provisions has been a subject of debate for maybe as long as these models and commentaries have existed. This is also the topic of this contribution. More specifically, the research questions of this chapter are:
1. What is the relevance of the (amended) OECD Models and Commentaries in respect of the interpretation of actual tax treaty provisions in the Netherlands, and what should this relevance be considering the developed benchmarks?
2. What is the relevance of the (amended) OECD Models and Commentaries in the Netherlands in respect of the interpretation of the term “employer” in the employment income provision under the Netherlands-Germany tax treaty (1959)?
3. Should the answers to the first two questions also be considered by other states when interpreting actual tax treaty provisions?
The answers to the questions will be prompted by the mentioned 2022 ruling by the Dutch Supreme Court (in Dutch: Hoge Raad [HR]).
In many countries, the OECD Models and their Commentaries play a role in the interpretation process of actual treaties. Therefore, the answer provided by the Dutch Supreme Court may, both from an academic and practical point of view, contribute to the learning processes in other states. In this context, this chapter discusses the 2022 ruling. The most important question in this case is: What is the relevance in the interpretation process of tax treaties of the OECD Commentaries published at the time that the actual tax treaty (in this case, the Netherlands-Germany tax treaty [1959]) was concluded (“treaty antecedent commentary”) and of the OECD Commentaries published after the actual tax treaty was concluded (“treaty posterior commentary”)?
To answer the research questions, this chapter adheres to the traditional doctrinal legal methodology. Doctrinal legal research covers positive law as contained in written and unwritten international, European, and national rules, treaties, court decisions, policies, principles, concepts, doctrines, and articles in the commentary literature. This methodology makes it possible to acquire a more complete understanding of the possible impact of the OECD Commentaries on the interpretation process of actual tax treaties. It also enables assessing, based on the developed benchmarks, whether positive law should be improved and, if so, how this should be done. Therefore, the author thinks that the application of the doctrinal legal methodology is appropriate to discuss the potential impact of the OECD Commentaries on the interpretation process of actual tax treaties.
First, the facts of the case are briefly described. Second, the decision of the Dutch Supreme Court is presented. Subsequently, the decision is analysed. The author develops benchmarks in order to assess the Supreme Court’s decision and to come up with suggestions for improvement if necessary. The benchmarks consist of three main components. The author explains that the interpretation process of an actual tax treaty should contribute to the protection of the rule of law and the enhancement of legal certainty. Furthermore, this process should also be consistent with good faith. In this context, the author also addresses what impact the decision may have on the tax treaty interpretation process of actual tax treaties if a contracting state wants to give effect under tax treaties to the OECD Commentaries. This chapter ends with the answers to the research questions including some main conclusions.