Double Tax Agreements

Bywater Investments v FCT [2016] HCA 45

Episode 3 dealt with how to approach the interpretation of DTAs.  Gordon J in this case (at [145-150]) provides further guidance in the context of a dispute about residency for income tax purposes. 

Where a DTA is set out in an Act in the same words, the ‘transposed text should bear the same meaning in the domestic statute as it bears in the treaty’3Vienna Convention on the Law of Treaties principles apply to its interpretation4, rather than the normal rules we apply to statutes generally.  Otherwise, the risk of differential outcomes across countries party to the DTA is created5, something which would frustrate the whole point of the agreement. 

This case is from Episode 19 of interpretationNOW!


Koowarta (1982) 153 CLR 168 (at 265).

4 Arts 31 & 32, set out in Pearce & Geddes (at [2.20]).

Povey [2005] HCA 33 (at [25]).