Based on Article 23, of COUNCIL DIRECTIVE (EU) 2017/1852 of 10 October 2017 on tax dispute resolution mechanisms in the European Union the provisions laid down in said Directive apply to any complaint submitted from 1 July 2019 onwards relating to questions of dispute relating to income or capital earned in a tax year commencing on or after 1 January 2018.

 

The purpose of the new rules is to ensure that businesses and citizens can resolve disputes related to the interpretation of tax treaties more swiftly and effectively.

 

The new rules will also cover issues related to double taxation which occurs when two or more countries claim the right to tax the same income or profits of a company or person. This can happen, for example, due to a mismatch in national rules or different interpretations of a bilateral tax treaty with regards transfer pricing arrangements.

 

Key differences between the old and the new rules:

Before Council Directive 2017/1852

Council Directive 2017/1852


Member States' obligation to resolve transfer pricing disputes not always enforced
 


Enforceable obligation on Member States to arrive at a resolution of all disputes within the scope of the directive
 


Often no recourse for taxpayers when mechanisms not applied properly
 


Recourse for taxpayers to national courts to unblock procedures
 


Unpredictable timeline for procedures
 


Clearly defined and enforceable timelines with a standard period of 6 months for the arbitration phase
 


Scope limited to issues related to transfer pricing and permanent establishments
 


Scope extented to all tax disputes between Member States that derive from tax treaties and other international agreements, that provide for the elimination of double taxation for businesses and citizens
 


No transparency requirements
 


Obligation to notify taxpayers and publish abstracts of the final decisions.
 

 

Click here to be forwarded to the text of COUNCIL DIRECTIVE (EU) 2017/1852 of 10 October 2017 on tax dispute resolution mechanisms in the European Union.

 

 

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