Chapter V
Guidelines for Interpretation
of the WTO Covered Agreements


OUTLINE

I Introduction
II Application of Arts. 31, 32 of the Vienna Convention
III WTO Rules on Conflicts: Effective Interpretation
IV The Status of Legitimate Expectations in Interpretation



I Introduction
According to Art. 11 of the DSU, the panel's role is to “make an objective assessment of the matter before it, including an objective assessment of the facts of the case and the applicability and conformity with the relevant covered agreements”. In the previous chapter, we have examined the general standard of review labeled as “an objective assessment” regarding “the facts of the case”; clearly, for panels to fulfil appropriately their functions as designated in Art. 11 of the DSU, it is also indiscerptible to make such an objective assessment of “the applicability and conformity with the relevant covered agreements”. Therefore, the interpretation issue of the covered agreements arises. In this section, the author will scrutinize guidelines for interpretation applied under the WTO jurisprudence.
To resolve a particular dispute, before addressing the parties' arguments in detail, it is clearly necessary and appropriate to clarify the general issues concerning the interpretation of the relevant provisions and their application to the parties' claims. However, the complex nature of the covered agreements has given rise to difficulties in interpretation.
As noted previously, GATT/WTO jurisprudence should not be viewed in isolation from general principles developed in international law or most jurisdictions; and according to Art. 3.2 of the DSU, panels are bound by the “customary rules of interpretation of public international law” in their examination of the covered agreements. A number of recent adopted reports have repeatedly referred, as interpretative guidelines, to “customary rules of interpretation of public international law” as embodied in the text of the 1969 Vienna Convention on the Law of Treaties (‘Vienna Convention’), especially in its Arts. 31, 32. It is in accordance with these rules of treaty interpretation that panels or the Appellate Body have frequently examined the WTO provisions at issue, on the basis of the ordinary meaning of the terms of those provisions in their context, in the light of the object and purpose of the covered agreements and the WTO Agreement. These Vienna Convention articles provide as follows:

“Art. 31: General Rule of Interpretation
1. 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.
2. The context for the purpose of the interpretation of a treaty shall comprise, in addition to the text, including its preamble and annexes:
(a) any agreement relating to the treaty which was made between all the parties in connexion with the conclusion of the treaty;
(b) any instrument which was made by one or more parties in connexion with the conclusion of the treaty and accepted by the other parties as an instrument related to the treaty.
3. There shall be taken into account together with the context:
(a) any subsequent agreement between the parties regarding the interpretation of the treaty or the application of its provisions;
(b) any subsequent practice in the application of the treaty which establishes the agreement of the parties regarding its interpretation;
(c) any relevant rules of international law applicable in the relations between the parties.
4. A special meaning shall be given to a term if it is established that the parties so intended.

Art. 32 Supplementary Means of Interpretation
Recourse may be had to supplementary means of interpretation, including the preparatory work of the treaty and the circumstances of its conclusion, in order to confirm the meaning resulting from the application of article 31, or to determine the meaning when the interpretation according to article 31:
(a) leaves the meaning ambiguous or obscure; or
(b) leads to a result which is manifestly absurd or unreasonable.”

II Application of Arts. 31, 32 of the Vienna Convention
Pursuant to Art. 31.1 of the Vienna Convention, the duty of a treaty interpreter is to determine the meaning of a term in accordance with the ordinary meaning to be given to the term in its context and in light of the object and purpose of the treaty. As noted by the Appellate Body in its Report on Japan-Alcoholic Beverages (DS8/DS10/DS11), “Article 31 of provides that the words of the treaty form the foundation for the interpretive process: ‘interpretation must be based above all upon the text of the treaty’. The provisions of the treaty are to be given their ordinary meaning in their context. The object and purpose of the treaty are also to be taken into account in determining the meaning of its provisions”. And in US ? Shrimps (DS58), the Appellate Body accordingly states: “A treaty interpreter must begin with, and focus upon, the text of the particular provision to be interpreted. It is in the words constituting that provision, read in their context, that the object and purpose of the states parties to the treaty must first be sought. Where the meaning imparted by the text itself is equivocal or inconclusive, or where confirmation of the correctness of the reading of the text itself is desired, light from the object and purpose of the treaty as a whole may usefully be sought.”
More specifically, the Panel in US-Sections 301-310 (DS152) rules that: “Text, context and object-and-purpose correspond to well established textual, systemic and teleological methodologies of treaty interpretation, all of which typically come into play when interpreting complex provisions in multilateral treaties. For pragmatic reasons the normal usage, and we will follow this usage, is to start the interpretation from the ordinary meaning of the ‘raw’ text of the relevant treaty provisions and then seek to construe it in its context and in the light of the treaty's object and purpose. However, the elements referred to in Article 31 - text, context and object-and-purpose as well as good faith - are to be viewed as one holistic rule of interpretation rather than a sequence of separate tests to be applied in a hierarchical order. Context and object-and-purpose may often appear simply to confirm an interpretation seemingly derived from the ‘raw’ text. In reality it is always some context, even if unstated, that determines which meaning is to be taken as ‘ordinary’ and frequently it is impossible to give meaning, even ‘ordinary meaning’, without looking also at object-and-purpose. As noted by the Appellate Body: ‘Article 31 of the Vienna Convention provides that the words of the treaty form the foundation for the interpretive process: 'interpretation must be based above all upon the text of the treaty'’. It adds, however, that ‘[t]he provisions of the treaty are to be given their ordinary meaning in their context. The object and purpose of the treaty are also to be taken into account in determining the meaning of its provisions’.” 1
In sum, as noted by the Panel in Canada-Automotive Industry (DS139/DS142), “understanding of these rules of interpretation is that, even though the text of a term is the starting-point for any interpretation, the meaning of a term cannot be found exclusively in that text; in seeking the meaning of a term, we also have to take account of its context and to consider the text of the term in light of the object and purpose of the treaty. Article 31 of the Vienna Convention explicitly refers to the ‘ordinary meaning to be given to the terms of the treaty in their [the terms'] context and in the light of its [the treaty's] object and purpose’. The three elements referred to in Article 31 - text, context and object and purpose - are to be viewed as one integrated rule of interpretation rather than a sequence of separate tests to be applied in a hierarchical order. Of course, context and object and purpose may simply confirm the textual meaning of a term. In many cases, however, it is impossible to give meaning, even ‘ordinary meaning’, without looking also at the context and/or object and purpose”. 2
With regard to Art. 32 of the Vienna Convention, it is repeatedly ruled that, “[t]he application of these rules in Article 31 of the Vienna Convention will usually allow a treaty interpreter to establish the meaning of a term. However, if after applying Article 31 the meaning of the term remains ambiguous or obscure, or leads to a result which is manifestly absurd or unreasonable, Article 32 allows a treaty interpreter to have recourse to ‘... supplementary means of interpretation, including the preparatory work of the treaty and the circumstances of its conclusion’. With regard to 'the circumstances of [the] conclusion' of a treaty, this permits, in appropriate cases, the examination of the historical background against which the treaty was negotiated.” 3
As a whole, under the WTO jurisprudence, with regard to the dispute among the parties over the appropriate legal analysis to be applied, as general principles or guidelines of interpretation, it is often begun with Art. 3.2 of the DSU. To go further, as noted by the Panel in Japan-Alcoholic Beverages, “the ‘customary rules of interpretation of public international law’ are those incorporated in the Vienna Convention on the Law of Treaties (VCLT). GATT panels have previously interpreted the GATT in accordance with the VCLT. The Panel noted that Article 3:2 DSU in fact codifies this previously-established practice”. Consequently, “the Panel concluded that the starting point of an interpretation of an international treaty, such as the General Agreement on Tariffs and Trade 1994, in accordance with Article 31 VCLT, is the wording of the treaty. The wording should be interpreted in its context and in the light of the object and the purpose of the treaty as a whole and subsequent practice and agreements should be taken into account. Recourse to supplementary means of interpretation should be made exceptionally only under the conditions specified in Article 32 VCLT”. 4
In short, it is may be the case that, it is generally considered that the fundamental rules of treaty interpretation set out in Arts. 31 and 32 of the Vienna Convention have attained the status of rules of customary international law. In recent years, the jurisprudence of the Appellate Body and WTO panels has become one of the richest sources from which to receive guidance on their application.
III WTO Rules on Conflicts: Effective Interpretation
The Panel Report on Turkey-Textile and Clothing Products (DS34) states concerning the conflicts issue that: 5
“As a general principle, WTO obligations are cumulative and Members must comply with all of them at all times unless there is a formal ‘conflict’ between them. This flows from the fact that the WTO Agreement is a ‘Single Undertaking’. On the definition of conflict, it should be noted that: ‘… a conflict of law-making treaties arises only where simultaneous compliance with the obligations of different instruments is impossible. ... There is no conflict if the obligations of one instrument are stricter than, but not incompatible with, those of another, or if it is possible to comply with the obligations of one instrument by refraining from exercising a privilege or discretion accorded by another’.
This principle, also referred to by Japan in its third party submission, is in conformity with the public international law presumption against conflicts which was applied by the Appellate Body in Canada - Periodicals and in EC - Bananas III, when dealing with potential overlapping coverage of GATT 1994 and GATS, and by the panel in Indonesia - Autos, in respect of the provisions of Article III of GATT, the TRIMs Agreement and the SCM Agreement. In Guatemala - Cement, the Appellate Body when discussing the possibility of conflicts between the provisions of the Anti-dumping Agreement and the DSU, stated: ‘A special or additional provision should only be found to prevail over a provision of the DSU in a situation where adherence to the one provision will lead to a violation of the other provision, that is, in the case of a conflict between them’.
We recall the Panel's finding in Indonesia - Autos, a dispute where Indonesia was arguing that the measures under examination were subsidies and therefore the SCM Agreement being lex specialis, was the only ‘applicable law’ (to the exclusion of other WTO provisions): ‘14.28 In considering Indonesia's defence that there is a general conflict between the provisions of the SCM Agreement and those of Article III of GATT, and consequently that the SCM Agreement is the only applicable law, we recall first that in public international law there is a presumption against conflict. This presumption is especially relevant in the WTO context since all WTO agreements, including GATT 1994 which was modified by Understandings when judged necessary, were negotiated at the same time, by the same Members and in the same forum. In this context we recall the principle of effective interpretation pursuant to which all provisions of a treaty (and in the WTO system all agreements) must be given meaning, using the ordinary meaning of words.’
In light of this general principle, we will consider whether Article XXIV authorizes measures which Articles XI and XIII of GATT and Article 2.4 of the ATC otherwise prohibit. In view of the presumption against conflicts, as recognized by panels and the Appellate Body, we bear in mind that to the extent possible, any interpretation of these provisions that would lead to a conflict between them should be avoided.”
It is clearly implied by the ruling above that, in the WTO system, any interpretation of the covered agreements that would lead to a conflict between them should be avoided. In this respect, as to WTO rules of conflicts, in the context that all WTO agreements were negotiated “at the same time, by the same Members and in the same forum”, the principle of effective interpretation is recalled. What a principle is it?
As ruled by the Panel in Japan-Alcoholic Beverage (DS8/DS10/DS11), effective interpretation is a principle “whereby all provisions of a treaty must be, to the extent possible, given their full meaning so that parties to such a treaty can enforce their rights and obligations effectively…. this principle of interpretation prevents [the panel] from reaching a conclusion on the claims … or the defense …, or on the related provisions invoked by the parties, that would lead to a denial of either party's rights or obligations.” 6 This ruling is upheld by the Appellate Body when ruling that, “[a] fundamental tenet of treaty interpretation flowing from the general rule of interpretation set out in Article 31 is the principle of effectiveness (ut res magis valeat quam pereat). In United States - Standards for Reformulated and Conventional Gasoline, we noted that ‘[o]ne of the corollaries of the ‘general rule of interpretation’ in the Vienna Convention is that interpretation must give meaning and effect to all the terms of the treaty. An interpreter is not free to adopt a reading that would result in reducing whole clauses or paragraphs of a treaty to redundancy or inutility’.” 7
财政部 国家税务总局


关于企业重组业务企业所得税处理若干问题的通知

财税[2009]59号


各省、自治区、直辖市、计划单列市财政厅（局）、国家税务局、地方税务局，新疆生产建设兵团财务局：

　　根据《中华人民共和国企业所得税法》第二十条和《中华人民共和国企业所得税法实施条例》（国务院令第512号）第七十五条规定，现就企业重组所涉及的企业所得税具体处理问题通知如下：

　　一、本通知所称企业重组，是指企业在日常经营活动以外发生的法律结构或经济结构重大改变的交易，包括企业法律形式改变、债务重组、股权收购、资产收购、合并、分立等。

　　（一）企业法律形式改变，是指企业注册名称、住所以及企业组织形式等的简单改变，但符合本通知规定其他重组的类型除外。

　　（二）债务重组，是指在债务人发生财务困难的情况下，债权人按照其与债务人达成的书面协议或者法院裁定书，就其债务人的债务作出让步的事项。

　　（三）股权收购，是指一家企业（以下称为收购企业）购买另一家企业（以下称为被收购企业）的股权，以实现对被收购企业控制的交易。收购企业支付对价的形式包括股权支付、非股权支付或两者的组合。

　　（四）资产收购，是指一家企业（以下称为受让企业）购买另一家企业（以下称为转让企业）实质经营性资产的交易。受让企业支付对价的形式包括股权支付、非股权支付或两者的组合。

　　（五）合并，是指一家或多家企业（以下称为被合并企业）将其全部资产和负债转让给另一家现存或新设企业（以下称为合并企业），被合并企业股东换取合并企业的股权或非股权支付，实现两个或两个以上企业的依法合并。

　　（六）分立，是指一家企业（以下称为被分立企业）将部分或全部资产分离转让给现存或新设的企业（以下称为分立企业），被分立企业股东换取分立企业的股权或非股权支付，实现企业的依法分立。

　　二、本通知所称股权支付，是指企业重组中购买、换取资产的一方支付的对价中，以本企业或其控股企业的股权、股份作为支付的形式；所称非股权支付，是指以本企业的现金、银行存款、应收款项、本企业或其控股企业股权和股份以外的有价证券、存货、固定资产、其他资产以及承担债务等作为支付的形式。

　　三、企业重组的税务处理区分不同条件分别适用一般性税务处理规定和特殊性税务处理规定。

　　四、企业重组，除符合本通知规定适用特殊性税务处理规定的外，按以下规定进行税务处理：

　　（一）企业由法人转变为个人独资企业、合伙企业等非法人组织，或将登记注册地转移至中华人民共和国境外（包括港澳台地区），应视同企业进行清算、分配，股东重新投资成立新企业。企业的全部资产以及股东投资的计税基础均应以公允价值为基础确定。

　　企业发生其他法律形式简单改变的，可直接变更税务登记，除另有规定外，有关企业所得税纳税事项（包括亏损结转、税收优惠等权益和义务）由变更后企业承继，但因住所发生变化而不符合税收优惠条件的除外。

　　（二）企业债务重组，相关交易应按以下规定处理：

　　 1.以非货币资产清偿债务，应当分解为转让相关非货币性资产、按非货币性资产公允价值清偿债务两项业务，确认相关资产的所得或损失。

　　 2.发生债权转股权的，应当分解为债务清偿和股权投资两项业务，确认有关债务清偿所得或损失。

　　 3.债务人应当按照支付的债务清偿额低于债务计税基础的差额，确认债务重组所得；债权人应当按照收到的债务清偿额低于债权计税基础的差额，确认债务重组损失。

　　 4.债务人的相关所得税纳税事项原则上保持不变。

　　（三）企业股权收购、资产收购重组交易，相关交易应按以下规定处理：

　　 1.被收购方应确认股权、资产转让所得或损失。

　　 2.收购方取得股权或资产的计税基础应以公允价值为基础确定。

　　 3.被收购企业的相关所得税事项原则上保持不变。

　　（四）企业合并，当事各方应按下列规定处理：

　　 1.合并企业应按公允价值确定接受被合并企业各项资产和负债的计税基础。

　　 2.被合并企业及其股东都应按清算进行所得税处理。

　　 3.被合并企业的亏损不得在合并企业结转弥补。

　　（五）企业分立，当事各方应按下列规定处理：

　　 1.被分立企业对分立出去资产应按公允价值确认资产转让所得或损失。

　　 2.分立企业应按公允价值确认接受资产的计税基础。

　　 3.被分立企业继续存在时，其股东取得的对价应视同被分立企业分配进行处理。

　　 4.被分立企业不再继续存在时，被分立企业及其股东都应按清算进行所得税处理。

　　 5.企业分立相关企业的亏损不得相互结转弥补。

　　五、企业重组同时符合下列条件的，适用特殊性税务处理规定：

　　（一）具有合理的商业目的，且不以减少、免除或者推迟缴纳税款为主要目的。

　　（二）被收购、合并或分立部分的资产或股权比例符合本通知规定的比例。

　　（三）企业重组后的连续12个月内不改变重组资产原来的实质性经营活动。

　　（四）重组交易对价中涉及股权支付金额符合本通知规定比例。

　　（五）企业重组中取得股权支付的原主要股东，在重组后连续12个月内，不得转让所取得的股权。

　　六、企业重组符合本通知第五条规定条件的，交易各方对其交易中的股权支付部分，可以按以下规定进行特殊性税务处理：

　　（一）企业债务重组确认的应纳税所得额占该企业当年应纳税所得额50%以上，可以在5个纳税年度的期间内，均匀计入各年度的应纳税所得额。

　　企业发生债权转股权业务，对债务清偿和股权投资两项业务暂不确认有关债务清偿所得或损失，股权投资的计税基础以原债权的计税基础确定。企业的其他相关所得税事项保持不变。

　　（二）股权收购，收购企业购买的股权不低于被收购企业全部股权的75%，且收购企业在该股权收购发生时的股权支付金额不低于其交易支付总额的85%，可以选择按以下规定处理：

　　 1.被收购企业的股东取得收购企业股权的计税基础，以被收购股权的原有计税基础确定。

　　 2.收购企业取得被收购企业股权的计税基础，以被收购股权的原有计税基础确定。

　　 3.收购企业、被收购企业的原有各项资产和负债的计税基础和其他相关所得税事项保持不变。

　　（三）资产收购，受让企业收购的资产不低于转让企业全部资产的75%，且受让企业在该资产收购发生时的股权支付金额不低于其交易支付总额的85%，可以选择按以下规定处理：

　　 1.转让企业取得受让企业股权的计税基础，以被转让资产的原有计税基础确定。

　　 2.受让企业取得转让企业资产的计税基础，以被转让资产的原有计税基础确定。

　　（四）企业合并，企业股东在该企业合并发生时取得的股权支付金额不低于其交易支付总额的85%，以及同一控制下且不需要支付对价的企业合并，可以选择按以下规定处理：

　　 1.合并企业接受被合并企业资产和负债的计税基础，以被合并企业的原有计税基础确定。

　　 2.被合并企业合并前的相关所得税事项由合并企业承继。

　　 3.可由合并企业弥补的被合并企业亏损的限额=被合并企业净资产公允价值×截至合并业务发生当年年末国家发行的最长期限的国债利率。

　　 4.被合并企业股东取得合并企业股权的计税基础，以其原持有的被合并企业股权的计税基础确定。

　　（五）企业分立，被分立企业所有股东按原持股比例取得分立企业的股权，分立企业和被分立企业均不改变原来的实质经营活动，且被分立企业股东在该企业分立发生时取得的股权支付金额不低于其交易支付总额的85%，可以选择按以下规定处理：

　　 1.分立企业接受被分立企业资产和负债的计税基础，以被分立企业的原有计税基础确定。

　　 2.被分立企业已分立出去资产相应的所得税事项由分立企业承继。

　　 3.被分立企业未超过法定弥补期限的亏损额可按分立资产占全部资产的比例进行分配，由分立企业继续弥补。

　　 4.被分立企业的股东取得分立企业的股权（以下简称“新股”），如需部分或全部放弃原持有的被分立企业的股权（以下简称“旧股”），“新股”的计税基础应以放弃“旧股”的计税基础确定。如不需放弃“旧股”，则其取得“新股”的计税基础可从以下两种方法中选择确定：直接将“新股”的计税基础确定为零；或者以被分立企业分立出去的净资产占被分立企业全部净资产的比例先调减原持有的“旧股”的计税基础，再将调减的计税基础平均分配到“新股”上。

　　（六）重组交易各方按本条（一）至（五）项规定对交易中股权支付暂不确认有关资产的转让所得或损失的，其非股权支付仍应在交易当期确认相应的资产转让所得或损失，并调整相应资产的计税基础。

　　非股权支付对应的资产转让所得或损失＝（被转让资产的公允价值－被转让资产的计税基础）×（非股权支付金额÷被转让资产的公允价值）

　　七、企业发生涉及中国境内与境外之间（包括港澳台地区）的股权和资产收购交易，除应符合本通知第五条规定的条件外，还应同时符合下列条件，才可选择适用特殊性税务处理规定：

　　（一）非居民企业向其100%直接控股的另一非居民企业转让其拥有的居民企业股权，没有因此造成以后该项股权转让所得预提税负担变化，且转让方非居民企业向主管税务机关书面承诺在3年（含3年）内不转让其拥有受让方非居民企业的股权；

　　（二）非居民企业向与其具有100%直接控股关系的居民企业转让其拥有的另一居民企业股权；

　　（三）居民企业以其拥有的资产或股权向其100%直接控股的非居民企业进行投资；

　　（四）财政部、国家税务总局核准的其他情形。

　　八、本通知第七条第（三）项所指的居民企业以其拥有的资产或股权向其100%直接控股关系的非居民企业进行投资，其资产或股权转让收益如选择特殊性税务处理，可以在10个纳税年度内均匀计入各年度应纳税所得额。

　　九、在企业吸收合并中，合并后的存续企业性质及适用税收优惠的条件未发生改变的，可以继续享受合并前该企业剩余期限的税收优惠，其优惠金额按存续企业合并前一年的应纳税所得额（亏损计为零）计算。

　　在企业存续分立中，分立后的存续企业性质及适用税收优惠的条件未发生改变的，可以继续享受分立前该企业剩余期限的税收优惠，其优惠金额按该企业分立前一年的应纳税所得额（亏损计为零）乘以分立后存续企业资产占分立前该企业全部资产的比例计算。

　　十、企业在重组发生前后连续12个月内分步对其资产、股权进行交易，应根据实质重于形式原则将上述交易作为一项企业重组交易进行处理。

　　十一、企业发生符合本通知规定的特殊性重组条件并选择特殊性税务处理的，当事各方应在该重组业务完成当年企业所得税年度申报时，向主管税务机关提交书面备案资料，证明其符合各类特殊性重组规定的条件。企业未按规定书面备案的，一律不得按特殊重组业务进行税务处理。

　　十二、对企业在重组过程中涉及的需要特别处理的企业所得税事项，由国务院财政、税务主管部门另行规定。

　　十三、本通知自2008年1月1日起执行。

财政部 国家税务总局　

　二○○九年四月三十日