Employers and employees, by June 30, 2019, are to have the option of arbitration to resolve double-taxation disputes with European Union member states, under a new dispute resolution system formally approved in a directive by EU finance ministers Oct. 10, a European Commission news release said.
Dispute resolution mechanisms for resolving double-taxation issues in EU member states are to be extended to employers and individuals under the new system, the finalized directive said. EU member states may put the directive into effect as early as January 2018 and would have until June 30, 2019, to incorporate the provisions of the directive into their national laws.
The new dispute resolution system would apply to all taxpayers subject to income taxation in EU member states covered by bilateral tax treaties and the EU Arbitration Convention, the directive said. Under the new dispute resolution system, employers are to be able to submit complaints to tax authorities of EU member states through a mutual agreement procedure. Each tax authority is to be required to acknowledge receipt of the complaints and inform applicable authorities of the other member states within two months from the receipt of any complaint meeting the directive’s criteria. Under the current system, EU member states resolve double-taxation disputes through bilateral treaties.
If EU member states do not resolve the dispute through the mutual agreement procedure within two years, or up to three years with written justification of a competent authority, the case may advance to a dispute resolution procedure. Advisory or alternative dispute resolution commissions to hear double-tax disputes are to be required by each EU member state’s national laws under the new system, the directive said. An advisory panel with a chair, up to two independent arbitrators, and up to two representatives of each EU member state would be appointed under the new system. Panel chairs of the advisory commissions are to be judges and the pool of independent arbitrators is to consist of independent persons of standing who are not employees of tax-advice companies and have not given professional tax advice, the directive said. An advisory commission or alternative dispute resolution commissions is required to notify competent authorities of recommendations for resolution of each question in dispute within 6 months after the date that commission was created, the directive said. Competent authorities are to impose a binding resolution to the dispute within 6 months after the commission’s notification of recommendations.
The new system is expected to resolve more than 900 outstanding double-taxation disputes between multinational companies and national tax authorities that are worth more than 10.5 billion euros ($12.4 billion), the European Commission news release said.
To contact the reporter on this story: Anna Massoglia in Washington at email@example.com
To contact the editor on this story: Michael Baer at firstname.lastname@example.org
The text of the approved directive is available at src.bna.com/tgR.
The European Commission news release regarding the directive is available at http://europa.eu/rapid/press-release_IP-17-3727_en.htm.
More information on payroll issues in the European Union can be found in the International Payroll Decision Support Network country primers.
Copyright © 2017 The Bureau of National Affairs, Inc. All Rights Reserved.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to email@example.com.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to firstname.lastname@example.org.
Put me on standing order
Notify me when new releases are available (no standing order will be created)