By Washburn E.W., Read J.W.
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Sample text
After the War, the UN did not initially take up the League’s role with respect to model tax treaties, despite the matter being on the agenda. Rather, in the mid1950s, in the context of closer economic integration within Europe, the Organisation for European Economic Co-operation (OEEC) took upon itself the task of producing a model treaty for use between its members. 20 The OEEC became the OECD in 1961 and issued a first model tax treaty in 1963. Like the League of Nations models before it, the 1963 OECD Model was essentially based on existing treaty practice and incorporated a schedular approach.
8 Fundamentals and sources of international tax law 9 government. 2 The result is an economic or financial relationship between community members and their government. However, not all government levies are taxes. 3 Taxes are often distinguished from a governmental charge for services. With a charge for services there will be an identifiable service provided for the payment. There is a big difference between a road toll paid to use a new road and paying tax for the general defence of the country.
Either approach may potentially give rise to treaty override or treaty underride. Treaty override occurs where a state gives effect to a treaty but subsequently enacts a domestic law that is inconsistent with the treaty. This may occur, for example, where the domestic law is enacted to close a perceived tax avoidance problem. 31 It is a contentious area, where interpretation of the treaty is critical, a topic turned to shortly. In a monist state, treaty override is possible only if domestic law is at least the equivalent of treaty law.