MFN clauses are commonly found in DTAAs between developed and developing countries. These clauses are negotiated into DTAAs to ensure that if one of the treaty partners offers a more beneficial treatment to another country, such treatment will also automatically apply under the DTAA that includes the MFN clause. Although MFN clauses are a popular topic of discussion in the context of treaty law as well as EU law, it is difficult to keep up with the actual application of these clauses because of their inter-dependence and also the complexity of language.
Decision of the Dutch Supreme Court
On 18 January 2019, the Dutch Supreme Court ruled in favour of a SouthAfrican company holding more than 10% in a Dutch subsidiary, that claimed a refund of the 5% dividend WHT it had previously paid, based on the MFN clause in the NL – SA DTAA.
