This is a chapter from the book: "Taxes Crossing Borders (and Tax Professors Too) - Liber Amicorum Prof Dr R.G. Prokisch".
I have known Rainer Prokisch since my first tentative steps in international tax law in the late 1980s. In those days, to obtain access to international literature and case law, I would regularly travel to Munich and work in the libraries of the Federal Fiscal Court and the Research Centre for International Tax Law of the University of Munich, then based at the department headed by Klaus Vogel. Rainer Prokisch had already been an accomplished associate of Klaus Vogel at the time, and I learned a lot about the law of double tax treaties in my discussions with him.
Rainer Prokisch still comments today on Article 16 OECD MC in the Vogel/Lehner Commentary,2 so I hope the jubilarian will be pleased when I take up a topic he also addresses therein: Article 16 OECD MC that deals with "directors' fees". Outside of the German-speaking countries, it is widely undisputed that this provision also includes fees paid to directors who perform managerial tasks in their capacity as a member of a board.3 As Rainer Prokisch rightly establishes, the not altogether congenial German translation, however, refers to "Aufsichtsratsvergütungen" (supervisory board remunerations) and, since 1977, to "Aufsichts- und Verwaltungsratsvergütungen" (supervisory and governing board remunerations).4 As a rule, the tax treaties concluded by Germany, Austria and Switzerland, adopt these terms in their German-language versions. In German legal terminology, one associates the term "Aufsichtsrat" with a monitoring activity. At least in Switzerland, the term "Verwaltungsrat" is also used for operational activities. Nevertheless, numerous legal authors and courts infer from the German-language version of Article 16 OECD MC that directors who perform managerial tasks do not fall under this provision.5
Rainer Prokisch addresses this problem:6 When a tax treaty uses the terms of the Model Convention in its English-language version (or equivalent terms in a different language version) but the formulation "Aufsichts- und Verwaltungsratsmitglied" in the German-language version, the same treaty contains a narrow German term and a broader English (or other language) term side by side. In such a case, if each Contracting State were to interpret the treaty according to its own national law, in the tax treaty concluded between Germany and the United Kingdom for instance, the member of a British "board of directors" that is a resident in Germany and performs managerial activities in Germany would, from the United Kingdom’s perspective, fall under the provision of the tax treaty corresponding to Article 16 OECD MC. From Germany’s perspective, the income would be covered by the provision of the treaty modelled on Article 7 OECD MC. Rainer Prokisch opposes such an interpretation:7 The two versions of the treaty can be best reconciled if one assumes that the directors of British companies in both Contracting States should be assessed under the English-language version, while those of German companies, according to the German-language version. An analogous principle should be applied in relation to other states.
The advantage of the view held by Rainer Prokisch is that it seeks a solution from the context of the convention instead of hastily resorting to national law. This autonomous interpretation of the tax treaty can help avoid cases of double taxation and double non-taxation. I personally make the case for going even a step further in this autonomous interpretation: The cause of the problem lies in the fact that - as Rainer Prokisch rightly points out8 – the German translation was not correct at the time.9 Yet nothing suggests that, by choosing the above German-language formulation, the translators of Article 16 OECD MC at the time also intended to deviate from the meaning of the OECD MC in its original English and French language version. Therefore, I believe that the better arguments are in favour of not overemphasising the use of the terms "Aufsichts- und Verwaltungsrat". The intention of the tax treaty provisions that use the said terms in the German-language version, and otherwise follow Article 16 OECD MC, is to thus also adopt the meaning of Article 16 OECD MC as it develops in the context of the OECD MC and is expressed in the English and French language versions. This must also be taken into account in the interpretation. There should be no room for a German-language "special way".
The case-law of the Federal Tax Court (Bundesfinanzhof -BFH) in Germany
An analysis of the case-law of the BFH (German Federal Tax Court) against this backdrop, however, reveals a different picture: The judgement of 5 October 1994 – I R 67/93 referred to a taxpayer resident in Germany who held the position of a president of Canada-based X Ltd and received income from this position.10 The BFH rejected the application of the tax treaty provision modelled on Article 16 OECD MC11:
"Though one could infer from the English-language version of the provision ‘directors' fees ... in this capacity as a member of the board of directors’ that all emoluments of the members of the board of directors should be subsumed under Article 16 of the tax treaty with Canada, both the German-language version (‚Aufsichts- und Verwaltungsratsvergütungen‘) and in particular the French-language text (‚tantièmes, jetons de prèsence et autres rétributions similaires‘) confirm the opinion also expressed in the relevant literature, i.e. that only the emoluments paid for a monitoring activity are subject to the special provision of Article 16 of the tax treaty with Canada […]."
Unfortunately, the BFH did not attach any significance to the fact that these rules were borrowed entirely from the OECD MC, and also refrained from addressing the question as to whether something in the OECD MC and in the Commentary could be used for the interpretation of this provision. The relevant literature also criticised the BFH for wrongly implying that the French text only covers monitoring activities.12
The BFH judgement of 27 April 2000 – I B 114/99 referred to an individual resident in Germany who was a member of the "Consejo de administracion" of a Spanish corporation.13 The BFH assumed that:
"Article 16 of the tax treaty with Spain does not establish a taxation right for Spain, since this provision only refers to supervisory board remunerations ("Aufsichtsratsvergütungen"), and a supervisory board - at least according to the sources which may be used in the summary process - cannot be created for Spanish companies according to the national company law ([...]). The Spanish tax administration does apply Article 16 of the treaty to executives of Spanish companies who are resident in Germany ([…]); it apparently followed this approach also in the dispute. From the perspective of German law, however, the emoluments of managing directors and members of the board do not fall under the scope of Article 16, but exclusively under that of Article 15 of the tax treaty with Spain. Apart from that, the applicants themselves stated that in the relevant period, the applicant also exercised management duties in addition to his monitoring activity at T [the Spanish company]; in such a case, the rule contained in Article 16 can anyway only be applied to an additional remuneration that is specifically attributable to the monitoring activity ([…]). The applicant obviously did not receive a special supervisory board member remuneration in this sense."
This decision is even sketchier in its reasoning: The BFH refers to the "perspective of German law" and assumes - without further explanation - that only remuneration for monitoring activities fall under Article 16. This superficial reasoning was possibly attributable to the fact that this judgment was merely a decision taken in a summary process.
The BFH judgement of 23 February 2000 – I R 46/03 referred again to an individual resident in Germany who was a member of a "Consejo de administracion" of a Spanish corporation.14 The BFH confirmed the decision of the tax court, according to which
"the therefore relevant taxation right of Spain does not result from Article 16 of the tax treaty with Spain. According to this however, supervisory and governing board remunerations [‘Aufsichtsrats- und Verwaltungsratsvergütungen’] and similar payments that an individual resident in Germany receives in their capacity as member of the supervisory or governing board [‘Aufsichts- oder Verwaltungsrat’] of a Spanish company can be taxed in Spain, but the plaintiff did not receive such remuneration. According to the findings of the tax court, however, during the year of the dispute the Plaintiff was a member of the ‘Consejo de administración’ of T, a body whose name can be translated as 'governing board' [‘Verwaltungsrat’]. In addition, the Plaintiffs rightly point out that, according to the Spanish version of the treaty, its Article 16 also covers the remunerations of a ‘miembro de un Consejo de administración’ (Federal Law Gazette II 1968, 10, 19). This suggests that, under the treaty, remunerations for participation in the ‘Consejo de administración’ of a Spanish company fall under the taxation right of Spain. This does not necessarily preclude that, in its function, this body differs from a supervisory board under German law ([…])."
For procedural reasons, the BFH was able to avoid making a final commitment in this particular case. The BFH, however, did consider an interpretation that it had explicitly ruled out in its decision of 27 April 2000 – I B 114/99, without providing any explanations for this contradiction or even addressing it at all. In any event, this decision seems to follow the view of Rainer Prokisch, according to which it may well be the case that income from the board activity for certain Spanish companies falls under the provision modelled on Article 16 OECD MC when the activity is not only of a monitoring nature, while income from the activities for German companies can only fall under the treaty provision if it relates to supervisory duties.15 The BFH does deal here with the Spanish-language version of the treaty, and presupposes the meaning of the German-language version - again without any explanation. Unfortunately, however, the BFH does not deal at all with the meaning of Article 16 OECD MC in its English and French language version, on which this treaty provision is based.
The BFH judgement of 5 March 2008 – I R 54, 55/07 referred to the salary of a managing director resident in Germany for their activity in a Belgian BVBA (limited liability company).16 Interestingly, the BFH did approve of the application of the treaty provision modelled on Article 16 OECD MC:
"Although the Plaintiff received remuneration from B for a managerial activity and not for a merely monitoring or controlling activity, such remuneration falls within the scope of Article 16 para.1 of the tax treaty with Belgium. Although paragraph 1 of the German-language version of the tax treaty with Belgium only lists supervisory and governing board remunerations [‘Aufsichts- und Verwaltungsratsvergütungen’] and similar payments, both the Dutch and the French language versions, to which the interpretation of the provisions of the tax treaty with Belgium must resort to in an equal measure as the German-language version, also mention the executives of a corporation. Moreover, Article 16 para.2 of the tax treaty with Belgium covers remunerations for managerial activities also in the German-language version, albeit only remunerations received by a general partner of a joint stock company based in Belgium, and a board member or managing director of a corporation based in the Federal Republic of Germany. In a literal application of the German-language text, Germany would have the taxation right for managing director salaries and board member emoluments of companies based in Germany, while the corresponding emoluments for managerial activities of corporations based in Belgium, with the exception of joint stock companies, could be taxed in Belgium only in accordance with Article 15 para.1 sentence 2 of the tax treaty with Belgium. On the other hand, pursuant to the French and Dutch language versions, managing directors' remunerations of GmbH and BVBA as well as of other corporations equally fall under Article 16 of the tax treaty with Belgium. Since, in case of doubt, it must be assumed that the Contracting States intend to mutually grant each other the same taxation rights, the Belgian version of Article 16 of the tax treaty with Belgium must be applied, according to which Belgium and Germany have identical rights for the taxation of managerial activities on their territory ([…]).”
It is interesting here that the BFH reaches a different conclusion than in the other cases: It infers from the "Belgian version" - obviously referring to the French and Dutch language texts - of Article 16 of the tax treaty - that the provision modelled on Article 16 OECD MC also covers managerial activities.17 The BFH gives priority to the broader version of the Dutch and French text over the German-language version, because in case of doubt it must be assumed that the Contracting States intend to mutually grant each other the same taxation rights. By applying the same reasoning, at least in the cases concerning Spain, the BFH could also have come to the conclusion that, in general, income from managerial activities can fall under the provision modelled on Article 16 OECD MC. The reference to the special rule of Article 16 para. 2 of the tax treaty between Belgium and Germany - which deviates from Article 16 OECD MC - was merely an additional argument. In view of this provision, however, the BFH could hardly argue that Article 16 of the tax treaty only covers income from managerial activities in respect of specific companies. Therefore, one should not underestimate the role of this special rule for the outcome.
The BFH judgement of 14 March 2011 – I R 29/10 referred to the tax treaty between Germany and Switzerland:18 Here, the BFH does not assume
"that the income of a 'delegierter Verwaltungsrat' (member of the board) of a Swiss stock corporation only falls under Article 16 of the 1992 tax treaty with Switzerland ([…]). Instead, it endorses the prevailing opinion that Article 16 of the 1992 tax treaty with Switzerland can only be applicable if the duties of a member of the board are limited to the monitoring of the management".
In this case, the BFH primarily relies on literature and ignores its case law on the tax treaty with Belgium, which is in contradiction to this decision.
The BFH decision of 30 September 2020, I R 76/17 dealt with an individual resident in Poland who was managing director of a corporation based in Germany:19
"According to the German-language version of Article 16 para.1 of the 2003 tax treaty with Poland, supervisory and governing board remuneration [‘Aufsichts- und Verwaltungsratsvergütungen’] and similar payments received by an individual resident in Poland 'in their capacity as member of the supervisory or governing board' [‘in ihrer Eigenschaft als Mitglied eines Aufsichts- oder Verwaltungsrats’] of a company based in Germany may be taxed in Germany. Article 16 para. 2 of the 2003 tax treaty with Poland extends this rule to include salaries, wages and other similar remuneration received by an individual resident in Poland 'in their capacity as authorised representative' [‘in ihrer Eigenschaft als bevollmächtigter Vertreter’] of a company based in Germany. In contrast, the Polish-language version of Article 16 para.1 of the 2003 tax treaty with Poland (Federal Law Gazette II 2004, 1305) does not refer to the member of a governing board [‘Verwaltungsrat’], but to the management or the board of directors (‘zarzadu’, ‘zarzadzie spolki’). According to the final provision of the 2003 tax treaty with Poland, the German and Polish language versions are equally binding.
[…] Even if the German-language version of Article 16 of the 2003 tax treaty with Poland does not expressly mention the managing directors of a GmbH, they must be considered ‘authorised representatives’ [‘bevollmächtigte Vertreter’] within the meaning of Article 16 para. 2 of the 2003 tax treaty with Poland ([…]). […] When determining the provisions of an international treaty, one must resort to the Vienna Convention on the Law of Treaties (VCLT) of 23 May 1969 (Federal Law Gazette II 1985, 927), which has been transpositioned into national law (Senate judgments of 11 July 2018 - I R 44/16, BFHE 262, 354; of 30 May 2018 - I R 62/16, BFHE 262, 54) since the entry into force of the approval law of 3 August 1985 (Federal Law Gazette II 1985, 926) . According to the VCLT, a treaty shall be interpreted in good faith in accordance with the ordinary meaning to be given to the terms of the treaty in their context and in the light of its object and purpose (Article 31 para. 1 VCLT). In particular the wording of the treaty (Article 31 paragraph 2 VCLT) and the ordinary meaning of the terms used are relevant (see Senate judgment of 27 February 2019 - I R 73/16, BFHE 263, 525, BStBl II 2019, 394). […] Consequently, according to the case law of the Senate (judgments of 25 February 2004 - I R 42/02, BFHE 206, 5, BStBl II 2005, 14; of 26 August 2010 - I R 53/09, BFHE 231, 63, BStBl II 2019, 147), treaty terms must be interpreted first according to the wording and the definitions of the treaty and then according to the meaning and context of the provisions within the treaty. In principle, any recourse to the definitions of national law should only be attempted at a review level further down the line. […] On this basis, one must establish in case of dispute that the term 'authorised representative' of Article 16 paragraph 2 of the 2003 tax treaty with Poland is not defined in the treaty. In addition, under consideration of the ordinary meaning of this term, the wording does not suggest any limitation to contractually authorised representatives. Instead, this is a general formulation that can also basically cover those representatives whose statutory power of representation is based on their executive position.
[…] In addition, it is relevant in the context of convention interpretation that Article 16 paragraph 2 of the 2003 tax treaty with Poland represents an extension of Article 16 paragraph 1 of the 2003 tax treaty with Poland, which is in turn based on Article 16 OECD MC. The objective of Article 16 OECD MC is to allocate taxation rights for supervisory and governing board remunerations [‘Aufsichts- und Verwaltungsratsvergütungen’] according to the place of residence of the company and not according to the principle of the place of activity as in Article 15 OECD MC. The reason for this is mainly practical difficulties in determining where such services are rendered (Article 16 number 1 OECD Model Commentary). In the double tax treaties concluded by Germany, this special rule was sometimes expressly extended to include managing directors (examples from Prokisch in Vogel/Lehner, cited above, Article 16 paragraph 21 et seq.). The express rules of other tax treaties, however, do not allow drawing the reverse conclusion that a lack of reference to managing directors in Article 16 paragraph 2 of the 2003 tax treaty with Poland precludes their inclusion in the scope of this provision. Instead, Article 16 paragraph 2 of the 2003 tax treaty with Poland contains a particularly extensive addition which (also) covers plenipotentiaries and authorised signatories. There is nothing to suggest that such a comprehensive extension should exclude managing directors.
[…] In addition, due to the Polish-language version of Article 16 paragraph 1 of the 2003 tax treaty with Poland, which refers exclusively to managing directors, Polish courts and administrative authorities will, at least in the constellation of the dispute -- a person resident in Poland who is the managing director of a company based in Germany --, will also assume that all managing directors' fees will be taxed in Germany."
This decision is particularly interesting: One must not ignore that the BFH based its judgement on the special rule of Article 16 paragraph 2 of the tax treaty: It is a convincing argument that, when authorised representatives fall under Article 16, this provision must a fortiori cover managing directors. What is significant, however, is the fact that the BFH leaves open whether the subsumption of the income of the managing director is not already a consequence of Article 16 paragraph 1 of the tax treaty - that is, the provision modelled on Article 16 OECD MC. What is of particular interest here is that the BFH establishes that the explicit extension of this provision to managing directors in some tax treaty provisions does not automatically imply that such income cannot also fall under Article 16 paragraph 1 OECD MC. Moreover, one should not ignore that the BFH stresses that Article 16 paragraph 1 was modelled on the OECD MC. It obviously attaches a certain significance to this fact. This possibly implies that a paradigm shift is underway.
What is irritating, however, is the assumption of the BFH that Polish courts and administrative authorities will obviously only deal with the Polish-language text. When two languages are equally authentic, there is no reason why a court or an administrative authority should limit itself to the text in its own national language. Courts and authorities in both states must deal with all language versions of an international treaty and must endeavour to find an interpretation that a priori rules out any contradictions between the different versions.
The case-law of the Supreme Administrative Court (Verwaltungsgerichtshof - VwGH) in Austria.
In its judgement of 31 July 1996, 92/13/0172, the VwGH (Austrian Supreme Administrative Court) was asked to rule on the provision, modelled on Article 16 OECD MC, in the tax treaty between Austria and Switzerland.20 According to this tax treaty, German is the only authentic language. This probably had a decisive influence on the decision of the VwGH. Essentially, the Court justified its decision as follows:
"As regards the German translation of Article 16 of the OECD Model Convention (1963) the Court unanimously held the view that this allocation rule only covers income paid for monitoring duties as supervisory board member (see Philipp/Loukota/Jirousek/Pollak, Internationales Steuerrecht 2, Z. 16-2; Loukota, Internationale Steuerfälle, Tz 614). The qualifying criterion will be whether the powers are limited to the monitoring of the management; this is not the case if the powers also include direct management or cooperation duties (see Vogel, DBA2, Art. 16 para. 12 on the unaltered content of Article 16 of the 1977 Model Convention)."
At least on the merits, the VwGH did not ignore the fact that the provision was modelled on the OECD MC, and even expressly stated the following:
"When interpreting double tax treaties, Contracting Parties must make sure that, where they incorporate the text of the OECD Model Convention in a double tax treaty, they must also attach the meaning of the corresponding provision of the OECD Model Convention to the individual provision of their bilateral treaty; as a result, the Commentary of the OECD Fiscal Committee existing at the time the treaty is concluded gains particular significance for the interpretation of the treaty (see Lang M., Die Bedeutung des Musterabkommens und des Kommentars des OECD-Steuerausschusses für die Auslegung von Doppelbesteuerungsabkommen, in Gassner/Lang/Lechner, Aktuelle Entwicklungen im Internationalen Steuerrecht, Vienna 1994, 22 and 30 et seq.)."
The VwGH then actually did make use of the OECD Commentary: "The Commentary on Article 16 of the 1963 Model Convention only refers to members of the supervisory board of a company, i.e. the body assigned with monitoring duties." Unfortunately, the VwGH again based its arguments on the German-language version of the Commentary. Consequently, the German translation of the OECD Commentary uses the same incorrect translation as in the text of the OECD Model Convention. If the VwGH had used the English-language version, it would have found the term "board of directors" there.
In its judgement of 10 May 2021, Ra 2019/15/0095 the VwGH was asked to rule on the tax treaty between Austria and Russia.21 The case involved three managing directors of an Austrian corporation. The residence of the managing directors was in dispute. The VwGH repealed the decision of the Austrian Federal Tax Court (Bundesfinanzgericht -BFG) and reviewed the application of the provision modelled on Article 15 OECD MC. Rather surprisingly, the VwGH also instructed the BFG in the resumed proceedings to review the application of the provision modelled on Article 16 OECD MC as well:
"In the case under consideration, the following must also be noted with regard to the allocation rules of the tax treaty with Russia:
The final provision of the tax treaty with Russia reads:
‘Done in duplicate at Moscow, this 13th day of April 2000, in the German, Russian and English languages, all texts being equally authentic. In case there is any divergency of interpretation between the German and the Russian texts, the English text shall be the operative one.’
In the English language version, Article 16 of the tax treaty with Russia reads:
Directors’ fees and other similar payments derived by a resident of a Contracting State in his capacity as a member of the board of directors of a company which is a resident of the other Contracting State may be taxed in that other State.’
In the proceedings to follow, the BFG will also have to examine whether the same meaning can be derived from the Russian text of Article 16 as from the German text of this article (‘Aufsichtsrats- und Verwaltungsratsvergütungen’). In view of the said final provision, in case of any divergencies, the decision would have to be based on the English version of Article 16 (see, on the one hand, Haubmann, SWI 2019, 175 and, on the other, Sutter/Burgstaller in Gassner/Lang/Lechner/Schuch/Staringer, Arbeitnehmer im Recht der Doppelbesteuerungsabkommen, 60 et seq).”
The decision of the VwGH must be criticised on several grounds: First, it is not understandable why the VwGH did not review the Russian text itself but instructed the lower court to do so. The review of this text is part of the interpretation and doing so would thus have been the task of the VwGH.22 Secondly, the VwGH assumes - without providing any detailed explanation - that the English text can only be used if there are any divergencies of interpretation between the German and the Russian text and therefore implicitly, not as an authoritative text in its own right. It instructs the BFG "to examine whether the same meaning can be derived from the Russian text of Article 16 as from the German text of this article".
Obviously, any consideration of the English text would have to take place in a second stage and only under certain conditions: "In view of the said final provision, in case of any divergencies, the decision would have to be based on the English version of Article 16 […]."23 As a result, however, the VwGH almost completely deprives the first sentence of the final provision of its meaning, since one can no longer speak of "all texts being equally authentic". Thus, according to the VwGH, the English text can be used only in exceptional cases – that is, when there are "divergencies" between the German and the Russian texts.24
Finally, what deserves particular criticism is the fact that the VwGH completely ignores that there is nothing to suggest that, upon the incorporation and translation of Article 16 OECD MC from the original English and French versions into German and Russian, the Contracting States intended to diverge from the meaning of the OECD MC. The rather mechanistical idea of tax treaty interpretation reflected in this decision is equally surprising:25 The VwGH obviously believes that the BFG merely needs to examine whether the same meaning can be attached to the Russian text as to the German text and, in "case of divergencies […] the decision would have to be based on the English text of Article 16". The VwGH thus assumes that the BFG can perform the assigned task by way of a mere translation of the text and a subsequent comparison of the different language versions, so as to determine the meaning of Article 16 of the tax treaty between Austria and Russia in this manner. The only indication that the VwGH may not have wanted the BFG to merely limit itself to the text in the different languages are the literature references it provides: Though the literature referred to reaches different conclusions, what the quoted authors have in common is that they interpret the provision of Article 16 OECD MC or that of Article 16 of the tax treaty between Austria and Russia by making use of all possible interpretative methods.26
Similarly to Article 33 of the VCLT, the final provision of the tax treaty between Austria and Russia only addresses one aspect of the interpretation procedure: Both provisions deal exclusively with the wording of the treaty terms and the methodological approaches on how to reach a - common - understanding of the wording. The wording, however, is not the end of the interpretation but is only at its beginning:27 According to Article 31 paragraph 1 VCLT, a treaty shall be interpreted in good faith in accordance with the ordinary meaning to be given to the terms of the treaty in their context and in the light of its object and purpose. Article 31 paragraph 3 VCLT thus emphasises that, in addition to the wording, the teleological and systematic interpretation play a role in the interpretation of international law treaties. Article 32 VCLT opens – albeit in a weaker form28 – the path to historical interpretation.29 Finally, Article 31 paragraph 4 VCLT clearly demonstrates the sheer diversity of possibilities presented by the interpretation of the wording of a treaty: a special meaning shall be given to a term if it is established that the parties so intended.30
In order to establish the said intention of the Contracting Parties, it will be necessary to understand the formulations of the treaty in their context, against the background of their object and purpose, and in the light of historical development.31 Therefore, the interpretation of the wording addressed by the final provision of the tax treaty between Austria and Russia and Article 33 VCLT is just one aspect of the interpretation procedure, to which no exclusive or overwhelming importance should be attached. Ultimately, interpretation is not about determining the meaning of a text, but about determining the meaning of a legal norm.32
The case-law of the BFH and the VwGH, the supreme tax courts in Germany and in Austria, on the treaty provisions modelled on Article 16 OECD MC puts great emphasis on the respective authentic languages. In the interpretation of the provisions of international treaties based on the rules of the OCED MC, one should not overvalue the importance attached to the authentic languages: The fact that the Contracting Parties merely translated provisions of the OECD MC in other - subsequently authentic - languages and otherwise incorporated a bilateral treaty without further ado, suggests that the Contracting Parties intended to attach the same meaning to the terms used in these provisions as the one resulting from the OECD MC. Consequently, an interpretation of these rules must resort to the OECD MC. When attempting to determine the meaning of this model provision on which the bilateral treaty provision is based, the only appropriate method to do so is to also consider its text in the original English and French language version. When a tax treaty only declares English but not French, or not even English as its authentic language, this should not represent an obstacle. When a closer look at the text of a provision in the authentic language of a treaty in its overall context reveals that it is a mere translation of the OECD MC, those attempting to interpret the provision can focus their attention on the English and French original right away. It would not be very convincing to interpret a provision modelled entirely on the OECD MC in a different manner in each tax treaty, depending on how the English and the French language version of the OECD MC was translated into the respective national language, simply because - more out of diplomatic practice - the corresponding texts were declared authentic in the respective treaty.
In the event that the supreme tax courts of Germany and Austria do not divert from the chosen course, one could consider adopting the proposal of Rainer Prokisch and translate the term "Member of the board of directors" into German as "Gesellschaftsorgan" in future treaties, or when existing treaties are revised.33 This is, however, a lengthy alternative, which also carries the risk that the case-law on the tax treaties will become further established with the old formulations, and the courts will wrongfully attach different meanings to the various formulations.