The relevance of the OECD Model Conventions and Commentaries for the interpretation of New Zealand tax treaties
New Zealand was not one of the founding members of the OECD (or its preceding organization, the Organisation for European Economic Co-operation (OEEC)) and thus was not a party to any deliberations concerning the drafting of model tax conventions until after it joined the OECD in 1973. Until its accession to the OECD, its treaty network was limited to only six treaties. It waited until the release of the 1977 OECD Model Convention and then started extending its treaty network to other OECD Members, first with Germany in 1978 following the non-binding recommendation of the OECD for Member countries to negotiate treaties with each other.
After its accession to the OECD, the New Zealand Parliament did not enact any laws which incorporated any part of the OECD Model Tax Convention on Income and on Capital (OECD Model) or its Commentaries into domestic law, which remains the case today. New Zealand, however, is a signatory to the Vienna Convention on the Law of Treaties (Vienna Convention), which was ratified by Parliament in 1971.
There have been a limited number of cases considered by New Zealand courts which involve the interpretation and application of treaties. In Commissioner of Inland Revenue (CIR) v. United Dominions Trust Ltd, McCarthy P noted that where treaties were incorporated into domestic law by legislation (as occurs with treaties in New Zealand) there was some grounds for concluding ‘that English Courts do not interpret a treaty solely in the light of doctrines peculiar to English law, but attempt to construe it as a whole, taking into account its object and purpose, in an endeavour to give effect to the expressed intentions of its framers’