- 24 -
Treaties and statutes are viewed under the Constitution as
on the “same footing”. Whitney v. Robertson, 124 U.S. 190, 194
(1888) (cited in Am. Air Liquide, Inc. & Subs. v. Commissioner,
116 T.C. 23, 28-29 (2001)); see secs. 894(a), 7852(d). Indeed,
when a treaty and statute relate to the same subject,
the courts will always endeavor to construe them so as
to give effect to both, if that can be done without
violating the language of either; but if the two are
inconsistent, the one last in date will control the
other, * * * [Whitney v. Robertson, supra at 194.]
For the reasons outlined below, we do not believe that section
267(a)(3) and section 1.267(a)-3, Income Tax Regs., are
inconsistent with Article 24(3).9
Article 24(3) provides as follows:
A corporation of a Contracting State, the capital
of which is wholly or partly owned or controlled,
directly or indirectly, by one or more residents of the
other Contracting State, shall not be subjected in the
first-mentioned Contracting State to any taxation or
any requirement connected therewith which is other or
more burdensome than the taxation and connected
requirements to which a corporation of that first-
mentioned Contracting State carrying on the same
activities, the capital of which is wholly owned by one
or more residents of that first-mentioned State, is or
may be subjected.
9 We note that the rule establishing parity between treaties
and Federal laws concerns statutes rather than Treasury
regulations, and that petitioner is challenging the regulation in
question rather than the statute. However, we need not, and do
not, decide whether the regulation is equivalent to a statute for
these purposes, because we find that it does not violate Article
24(3). See Blessing & Dunahoo, Income Tax Treaties of the United
States (1999), par. 1.03[1][a][ii]; cf. Am. Air Liquide, Inc. &
Subs. v. Commissioner, 116 T.C. 23 (2001); UnionBanCal Corp. v.
Commissioner, 113 T.C. 309 (1999).
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