Tax certainty and taxation of international pension funds : the complicating and costly role of domestic courts

Noting the heightened concern about tax certainty from 'certain court decisions' and recent updates to international tax rules designed to promote certainty in the international taxation of pension funds, this article examines a UK and an Australian court decision regarding the international taxation of pensions. It finds that despite the different legal frameworks applying in each case, both decisions heighten concerns about tax uncertainty by commonly employing a domestic approach to construe the relevant international instrument, albeit that both decisions purport to follow international customary rules of interpretation. The article then concludes by reiterating an earlier suggestion that greater predictability and certainty could well be achieved if an International Tax Court (ITC) is established to propel and facilitate the uniform and consistent application and interpretation of treaty obligations and add to the range of dispute resolution options that were recently enhanced in the OECD Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (MLI) by the inclusion of mandatory binding arbitration.