On 10 October 2017, the ECOFIN Council formally adopted a Directive on tax dispute resolution mechanisms in the EU. The objective is to establish more effective and efficient procedures within the EU. The Directive builds on the existing Convention 90/436/EEC on the elimination of double taxation in connection with the adjustment of profits of associated enterprises (EU Arbitration Convention).
This new EU Directive introduces a more extensive scope and is no longer limited to cases of double taxation arising from transfer pricing adjustments and attribution of profits to permanent establishments. It also implements more safeguards in view of taxpayers’ rights, including access to the procedure, clear and shorter timeframes and an obligation for Member States to reach a solution. The Directive provides for appeal possibilities for taxpayers in order to assure that competent authorities apply the provisions of the Directive.
The adoption of the Directive is an important step forward and aims at implementing a harmonized and transparent framework in the EU to resolve an increasing amount of double or multiple taxation disputes. Member States, including Belgium, must implement the Directive into their national laws by 30 June 2019 at the latest. It will be applicable to any complaint submitted from 1 July 2019 onwards relating to tax disputes concerning income or capital earned in a tax year commencing on or after 1 January 2018.
We refer to a PwC EUDTG newsletter in this respect, which you can read here.