New Directive on Tax Dispute Resolution Mechanisms

  • By:Corrieri Cilia Legal
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During a meeting on the 23rd of May, the Economic and Financial Affairs Council of the European Union (ECOFIN) reached an agreement on the terms proposed for a Council Directive on tax dispute resolution mechanism in the EU.

The proposed directive comprises a reinforced mandatory binding dispute resolution mechanism in the European Union. The aim for this Directive is to advance present mechanisms for resolving tax disputes between Member States resulting from analysis of double tax agreements, refining admittance to and the effectiveness of the Mutual Agreement Procedure (MAP) and determining procedures for disputes resolution by arbitration. Double taxation embraces a supplementary tax charge, and a rise in tax liabilities or a decrease in losses that might be utilized to counterbalance taxable profits.

A vote will be taken in the European Parliament’s ECON committee on 8 June 2017, and a plenary session is scheduled for 4 July 2017. Once adopted, Member States will have until 30 June 2019, to transpose the Directive, which will apply to complaints submitted after that date on issues relating to tax years starting from 1 January 2018. However, Member States may apply the Directive to complaints related to earlier tax years.

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Posted in: International Taxation