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Double tax dispute regulations

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The Double Taxation Dispute Resolution (EU) Regulations, SI 2020/5, have been laid before Parliament. The regulations implement the new EU Arbitration Directive, and will come into force on 14 February 2020.

The Directive, which will apply to disputes involving tax years beginning on or after 1 January 2018, introduces a mutual agreement procedure for resolving disputes within two years, after which an advisory commission can be set up to deliver an opinion within six months. The process for presenting a case under the Arbitration Directive is similar to the existing dispute-resolution mechanism (the Union Arbitration Convention), which deals with questions around transfer pricing and permanent establishment. The Arbitration Directive has a wider scope than the existing system and will cover all disputes arising from the interpretation and application of tax treaties.

The UK is obliged to implement and retain the Arbitration Directive while it remains an EU member state (and during the Brexit transition period), but its future application will be dependent on the relationship agreed with the EU.

Issue: 1473
Categories: News