This study clarifies the meaning and application of Article 3(2) of the OECD Model Tax
Convention on Income and on Capital. It maps the entire historical debate on the provision
illuminates flawed assumptions and misunderstandings in its course and outlines how these
continue to fuel the current controversies. In addition it provides a comprehensive analysis
of German case law concerning the interpretation of tax treaties and examines the extent to
which the German Federal Fiscal Court has been influenced by views developed in doctrine.
Finally it clarifies the relationship between Article 3(2) and the rules on treaty
interpretation codified in the Vienna Convention on the Law of Treaties the meaning of
'context' and how the condition 'unless the context otherwise requires' is to be applied.
Thereby an approach is submitted that is firmly based on public international law principles
and transcends the current controversies into a holistic synthesis.
