Income Tax Treaties: Competent Authority Functions and Procedures of Selected Countries (D-G) (Portfolio 6887)

Tax Management Portfolio, Income Tax Treaties: Competent Authority Functions and Procedures of Selected Countries (D–G), No. 6887, discusses the competent authority functions and procedures of Denmark, France, and Germany. To view this Portfolio, visit Bloomberg Tax for a free trial.

Bloomberg Tax

This Portfolio is available with a subscription to Bloomberg Tax, a comprehensive research solution including over 500 Tax Management Portfolios™, practice tools, primary sources and timely news.

Description

Tax Management Portfolio, Income Tax Treaties: Competent Authority Functions and Procedures of Selected Countries (D–G), No. 6887, discusses the competent authority functions and procedures of Denmark, France, and Germany. Each chapter initially focuses on the mutual agreement procedure that is available to taxpayers subject to double taxation, and in that connection discusses such topics as the basic procedure for requesting competent authority relief, statute of limitations issues, the role of Appeals (if any), the small case procedure (if any), interest on deficiencies and refunds, and the possibility of arbitration. If a country also has procedures for Advance Pricing Agreements, those are also considered.

Each chapter then discusses the procedures relating to consultation between competent authorities regarding the interpretation or application of an income tax treaty, exchange of information, and assistance in collection. With respect to exchange of information, each chapter also considers procedures under any tax information exchange agreements to which the country is a party.

For competent authority functions and procedures of the United States, see 940 T.M., U.S. Income Tax Treaties — U.S. Competent Authority Functions and Procedures.

This Portfolio may be cited as Wittendorff, Monsellato, Lesprit, Golz, Nientimp, and Roeder, 6887 T.M., Income Tax Treaties: Competent Authority Functions and Procedures of Selected Countries (D–G).

Authors

Jens Wittendorff, Esq.

Jens Wittendorff works in the Ernst & Young Copenhagen office and is an honorary professor at the University of Aarhus. He has a Master of Science in International Business Administration and Commercial Law and a Doctor of Laws. He is the author of numerous articles and books on international tax law, including the Danish branch reports on Transfer Pricing and Intangibles for the 2007 IFA Congress and on Business Restructurings for the 2009 IFA Congress. His dissertation, Transfer Pricing and the Arm's-Length Principle in International Tax Law, has been published by Kluwer Law International. He is writing the “At Arm's-Length” column in Tax Notes International.

Gianmarco Monsellato, Esq.

Gianmarco Monsellato is a registered attorney, partner and former CEO of Taj (since 2004) in France, an international law firm and part of the global Deloitte member firm network, and Deloitte Global Tax & Legal Leader for Client & Markets. His experience covers a wide range of industries and he advises and defends leading European, Chinese, Japanese, Korean, and U.S. multinational companies with respect to their international tax and transfer pricing policies.

Gianmarco has more than 20 years of experience and created the French transfer pricing group. He has led numerous negotiations with respect to Advance Pricing Agreements, Competent Authority procedures, audit defense procedures, and planning engagements. In addition, Gianmarco has negotiated many successful settlements with the French tax authorities and won a significant French appeal court case restricting the ability of the tax authority to shift the burden of proof to the taxpayer. For the past several years, Gianmarco has been heavily involved in enterprise reengineering projects, including many supply chain management and intangible planning engagements. He serves as a strategic tax adviser to CFOs and tax vice presidents of leading companies. As one of the very few attorneys who have been heard both by the French Senate and the French Congress, he is considered a thought leader on tax governance.

Gianmarco won a United Nations’ Women's Empowerment Principles (WEP) leadership award in the Business Case for Action Award 2013 category. This event rewarded five CEOs in the world for their exemplary actions in favor of gender equality.

Gianmarco is the chairman of the International Chamber of Commerce French Tax Committee and a member of the Scientific Committee of the Financial Directors, Management Control's French national association Directeurs Financiers et de Contrôle de Gestion (DFCG), and the International Fiscal Association (IFA). He is frequently consulted by the French Congress on international tax matters.


Eric Lesprit, Esq.

Eric Lesprit is a registered attorney, partner of Taj in France, an international law firm and part of the global Deloitte member firm network. His experience covers a wide range of industries as he was the French Competent Authority in charge of Advance Pricing Agreements and Mutual Agreement Procedures.

Eric has more than 15 years of experience in transfer pricing and international tax. Beginning in 1998, he was with the French Tax Administration, working on company and individual international tax issues. He took part in the creation of the Advance Pricing Agreement program in France in 1999, concluded the first French APA, and then became the head of the program. He was also involved in the French legislative drafting process as a specialist on fighting tax fraud, tax control policy, the management of tax information exchanges, and the French audit directions network.

At the international level, for several years he set forth the French position at the European Community and the OECD, especially with respect to the fight against tax havens and the negotiation of tax information exchange agreements with non-cooperative territories.

From 2003 to 2006, Eric was in Washington, D.C., as a technical advisor to the IMF, focusing on public revenues (taxes and customs duties). In 2015, he joined the Transfer Pricing department of Taj as a Partner. He advises on international taxation in general and transfer pricing in particular.


Silke Golz

Silke Golz is a former director on Deloitte's German Transfer Pricing Team in Stuttgart and is a specialist in transfer pricing and valuation issues. She has been extensively involved in planning and documentation projects for companies with cross-border transactions. Silke has significant experience in performing functional and risk analyses, conducting benchmark studies, applying adjustment calculations to transfer prices and profitability indicators, and analyzing all other economic aspects of transfer pricing, as well as assisting with Advance Pricing Agreement and Competent Authority negotiations. She gives regular speeches on transfer pricing and is also the author of numerous articles on the subject. Silke is a graduate of the University of Bochum, having received her diploma in business economics (Diplom-Ökonom) from the university.

Dr. Axel Nientimp

Dr. Axel Nientimp is currently a partner with the Global Transfer Pricing Services team at KPMG AG in Düsseldorf. Formerly a partner with Deloitte's German Transfer Pricing Team in Düsseldorf, he has more than ten years of experience in international taxation and transfer pricing, and has substantial experience in representing multinational enterprises in transfer pricing tax audits and Competent Authority negotiations. He is also extensively involved in providing planning and documentation solutions to companies with cross-border transactions. Axel is a lecturer for business taxation at the University of Duisburg-Essen. He also gives regular speeches on transfer pricing and is the author of numerous articles on transfer pricing and international taxation. He is a certified tax advisor and a member of the Tax Advisors Association. Axel is an alumnus of the University of Bochum, having received his Ph.D. in business taxation and diploma in business economics (Diplom-Ökonom) from the university.

Dr. Achim Roeder

Dr. Achim Roeder is a partner with the Global Transfer Pricing Services team at KPMG AG in Frankfurt. Formerly a partner in Deloitte's German Transfer Pricing Group, he has more than ten years of experience in international taxation and transfer pricing. Achim has advised leading multinationals in various industries, including the chemical, financial services, pharmaceutical, and semiconductor industries. His projects include transfer pricing planning with respect to European supply chain reorganizations, as well as transfer pricing documentation and German audit defense. Achim lectures regularly on tax law at the Ruhr-University in Bochum. He also gives regular speeches on transfer pricing and is the author of numerous articles on the subject. Achim is a German tax advisor and an alumnus of the University of Bochum, having received his Ph.D., Master of Arts, and diploma in business economics (Diplom-Ökonom) from the university.

Table of Contents

Detailed Analysis
Chapter 45 — DENMARK
45:I. Introduction
45:II. Competent Authority
A. General
B. Identification
45:III. Mutual Agreement Procedure — Taxpayer Cases
A. Treaty Provisions on Mutual Agreement
1. OECD Model
2. Denmark Income Tax Treaties
B. Background
1. Historical Background
2. Powers of Competent Authorities in a MAP
3. Types of Cases
a. Allocation Cases
b. Non-Allocation Cases
4. Program Evaluation
5. Self-Help Alternative
C. Competent Authority Process
1. Sources
2. Taxes and Issues Covered
3. Who Can Apply
4. Timing of Requests
a. In General
b. Statute of Limitations and Other Procedural Limitations
(1) In General
(2) Treaty Provisions
5. Unilateral Relief
6. The Role of Appeals
7. Pre- and Post-Filing Conferences
8. Information Required
9. Protective Measures
10. Small Case Procedure
11. Simultaneous Appeals Procedure
12. Denial of Request
13. Processing of MAP Cases
a. Stages of Procedure
b. Withdrawal of MAP Request
c. Effect on Domestic Proceedings
d. Appeal
45:IV. Arbitration
A. Tax Treaties
B. EU Arbitration Convention
45:V. Advance Pricing Agreements
A. Introduction
B. Scope of APAs
C. Duration
D. Retroactive Effect
E. Pre-Filing Stage
F. Formal Application
G. Evaluation and Negotiation of the APA
H. Formal Agreement of APA
I. Documentation Requirements
J. Small Business APAs
K. Time Frame
L. Withdrawing from the APA Process
45:VI. Consultation Between Competent Authorities Regarding Treaty Interpretation or Application
45:VII. Exchange of Information
A. In General
1. Exchange of Information Outside of International Agreements
2. Exchange of Information Under International Agreements
B. Exchange of Information Under Income Tax Treaties
1. In General
2. Types of Exchanges
a. In General
b. Exchange Regarding a Change in Tax Law
c. Automatic Exchange of Information
d. Spontaneous Exchange of Information
e. Specific Requests for Information
f. Industry-Wide and Issue-Specific Exchanges of Information
3. Simultaneous Examination Programs
a. General Purpose
b. Specific Objectives
c. Procedures
d. Disclosure of Information
4. Responding to Specific Requests Under Denmark's Tax Treaties
a. Specificity of Request
b. Use of Revenue Powers to Obtain Information
c. Mutuality Clause
5. Business Secrets
6. Restrictions on Disclosure and Use of Exchanged Information
C. Exchange of Information Under FATCA IGA Concluded with the United States
1. Introduction
2. Implementation of the FATCA IGA in Denmark
D. Exchange of Information Under the CRS
1. Introduction
2. Implementation of the CRS in Denmark
45:VIII. Assistance in Tax Collection
Chapter 50 — FRANCE
50:I. Introduction
50:II. The Competent Authority of France
50:III. The Mutual Agreement Procedure for Taxpayer Cases
A. Background
B. The Role of the French Competent Authority
C. The Procedure
1. Scope of a MAP
2. Initiating a MAP or a Proceeding Under the EU Arbitration Convention
a. Timeframe for Initiating the Procedure
b. Situations Precluding the Opening of a Procedure
3. Submission of the Request and Consequences for the Taxpayer
a. Content of the Application
b. Starting Point of the Procedure
c. Suspension of Recovery of Taxes, Late Payment Interest, and Penalties
4. The Procedure for Resolving Double Taxation
a. Step One — Internal Phase of the Procedure
b. Step Two — International Phase of the Procedure
c. Conclusion of the Procedure
D. The Arbitration Procedure
1. Setting Up an Advisory Commission
2. Execution of Proceedings
3. Opinion of the Advisory Commission
E. Practical Experience and Advice
50:IV. Advance Pricing Agreements
Introductory Material
A. Objectives of an APA
B. Role of the MEJEI (Mission d'Expertise Juridique et Economique Internationale)
C. Transactions Covered by an APA
D. APA Procedure
E. Content of an APA
F. Advantages and Disadvantages of an APA
50:V. Exchange of Information
A. Exchange of Information Under Income Tax Treaties
B. Exchange of Information Under Tax Information Exchange Agreements
C. Exchange of Information Under FATCA IGA Concluded with the United States
1. Introduction
2. Implementation of the FATCA IGA in France
3. Explanation and Commentary of FATCA IGA
D. Exchange of Information Under the CRS
1. Introduction
2. Implementation of the CRS in France
E. Exchange of Information Under the European Union Rules
F. Exchange of Information Under OECD Standards and Rules
50:VI. Assistance in Tax Collection
Chapter 55 — GERMANY
55:I. Introduction
55:II. The German Competent Authority
55:III. The MAP for Taxpayer Cases and Arbitration Procedures
A. Treaty Provisions on Mutual Agreement and Arbitration
B. The Process of MAPs and Arbitration
C. Arbitration in Particular
1. Arbitration Under EU Arbitration Convention
2. Arbitration Under German Income Tax Treaties
55:IV. Advance Pricing Agreements
A. Introduction
B. Objectives of an APA
1. Unilateral APAs
2. Bilateral APAs
3. Multilateral APAs
C. Statutory Basis of MAP APAs
D. MAP APA Process
1. Pre-Filing Meeting
2. APA Application
3. MAP APA Negotiations
4. Implementation of MAP APA
5. Monitoring of Agreement
E. Consequences of Noncompliance
F. Renewal of an APA
G. Conclusion
55:V. Consultation Between Competent Authorities Regarding Treaty Interpretation or Application
Introductory Material
A. Scope of Consultation Provisions
B. Consultation Procedure
C. Legal Effect of Consultations
55:VI. Exchange of Information
A. In General
B. Exchange of Information Under Income Tax Treaties
C. Tax Information Exchange Agreements
D. Exchange of Information Under Other International Agreements
E. Exchange of Information Under FATCA IGA Concluded with the United States
1. Introduction
2. Implementation of the FATCA IGA in Germany
F. Exchange of Information Under the CRS
1. Introduction
2. Implementation of the CRS in Germany
55:VII. Assistance in Tax Collection

Working Papers

Table of Worksheets
Worksheet 21 Electronic Resources Relating to French Competent Authority
Worksheet 31 German Treaties with MAPs and/or Arbitration Procedures
Worksheet 32 Time Limit for Requesting a MAP
Worksheet 33 German MAP Memorandum of July 13, 2006 (Unofficial Translation)
Worksheet 34 Germany's Transfer Pricing Administrative (Audit) Principles as of April 12, 2005 (Unofficial Translation)
Worksheet 35 Circular of October 5, 2006 — Procedures for Obtaining Advance Pricing Agreements Under Germany's Treaties (Unofficial Translation)
Worksheet 36 Memorandum of Understanding on Arbitration Procedure Under Germany-U.S. Income Tax Treaty