This thesis addresses the relationship between domestic tax law and tax treaties in a Swedish context, particularly with the purpose of clarifying when the legal consequences of domestic tax law are to prevail over those in tax treaties. The question of primacy arises due to domestic law and tax treaties often apply to the same situation, while providing for different legal consequences. Thus, when both of these sources of law are applicable, it may well be necessary to determine which legal consequence should affect the taxation of a taxpayer.

There are two overall aims of this thesis. The first aim is to identify situations when domestic Swedish tax law is to be given priority over tax treaties. To fulfil this aim, three research questions are addressed. The first research question concerns determining in what situations both domestic tax law and tax treaties are applicable, but provide for different legal consequences. The second research question regards to what extent domestic tax law is to be given priority over tax treaty rules due to special provisions regulating the relationship between domestic law and tax treaties, including a rule found in Incorporation Acts and sometimes referred to as “the golden rule”. The third research question is under what conditions rules in domestic tax law represent a clearly expressed intention that they are to be applied irrespective of tax treaties. The second aim is to highlight the balancing of interests that the relationship between domestic tax rules and tax treaties brings to the fore, by evaluating the primacy of domestic law and, in the light of this, to propose when rules in domestic tax law should be given priority. This evaluation centres on the interests of upholding constitutional principles, acting in accordance with international law, eliminating double taxation and preventing tax avoidance. To fulfil this aim, two additional research questions are addressed. The fourth research question is to what extent the primacy of domestic tax law contributes to respecting Swedish constitutional law and whether the primacy of domestic tax law is in accordance with international law. The fifth research question is whether the primacy of domestic tax law is likely to result in double taxation or in opportunities for tax avoidance.

The subject of this thesis concerns a limited but fundamental part of the relationship between domestic tax rules and tax treaties in Sweden. It shines a light on the limitations that exist with regard to whether, and to what extent, tax treaties have an impact in a Swedish domestic law context. In some situations, rules in domestic law are given priority in order to hinder tax treaties from creating tax claims that do not exist in domestic law. In other situations, rules in domestic law are given priority for other reasons. In the latter case, giving priority to domestic tax rules may constitute an internationally wrongful act, which, in turn, may have economic, political and legal consequences.