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Friday, 26.04.2024, 09:12
Fair taxation: Commission welcomes new rules for resolving tax disputes
EU Member States formally agreed on a new set of new rules
to better resolving tax disputes. Recent decision taken by EU finance
ministers at the ECOFIN Council meeting in Luxembourg will ensure
that businesses and citizens can resolve disputes related to the interpretation
of tax treaties more swiftly and effectively. It will also cover issues
related to double taxation - a major obstacle for businesses, creating
uncertainty, unnecessary costs and cash-flow problems.
Double taxation refers to cases where two or more countries
claim the right to tax the same income or profits of a company or person. It
can occur, for example, due to a mismatch in national rules or different
interpretations of a bilateral tax treaty with regards transfer pricing
arrangements.
Commissioner for Economic and Financial Affairs, Taxation
and Customs, Pierre Moscovici, underlined that the new system would improve
legal certainty and EU competitiveness by creating a binding obligation on EU states’
authorities to resolve tax disputes in a timely manner. This is an important
step to allow EU citizens and businesses alike to have fair tax treatment. He
added that now the EU states’ quick actions are needed (together with the
European Parliament’s support) to upgrade these rules.
Certainty in taxation issues
The improvements to the current rules agreed by EU finance
ministers will give taxpayers much more certainty when it comes to seeking
resolution to their interpretation of tax treaties or double taxation problems.
In particular, a wider range of cases will be covered and the member states
will now have clear deadlines to agree on a binding solution, giving citizens
and companies more timely decisions. The EU states will now have a legal duty
to take conclusive and enforceable decisions under the improved dispute
resolution mechanism; if not, the national courts will do this for them.
Present agreement will ensure that taxpayers faced with tax
treaty disputes can initiate a procedure whereby the EU states in question must
try to resolve the dispute amicably within two years. If at the end of this
period, no solution has been found, the member states must set up an Advisory
Commission to arbitrate. If EU member states fail to do this, the taxpayer can
bring an action before the national court to do so. This Advisory Commission
will be comprised of 3 independent members and representatives of the competent
authorities in question. It will have 6 months to deliver a final, binding
decision. This decision will be immediately enforceable and must resolve the
dispute.
Source:
http://europa.eu/rapid/press-release_IP-17-3727_en.htm?locale=en