The European Parliament's Economics and Monetary Affairs Committee has backed proposals for the improved resolution of double taxation disputes within the EU.
The Committee approved the measures by 41 votes to one, with one abstention. The opinion of the Parliament will now be passed on to the European Council for consideration.
Last month, the Council agreed to a scheme that aims at improving the mechanisms used for resolving disputes between EU member states that arise from the interpretation of agreements on the elimination of double taxation. The draft directive requires dispute mechanisms to be mandatory and binding, with clear time limits and an obligation to reach results.
The directive would permit taxpayers to initiate a "mutual agreement procedure," under which member states would be required to reach an agreement within two years. If this procedure failed, an arbitration procedure would be launched to resolve the dispute within specified timelines. An advisory panel of between three and five independent arbitrators would be appointed, and would issue a binding opinion on the case.
According to a press release from the European Parliament, the committee backed the stricter deadlines contained in the draft, along with the proposed arbitration procedure and the creation of an advisory panel.
However, Michael Theurer, rapporteur on the Committee's draft report, said that MEPs want "to give national authorities added incentives to act quickly and move to resolution." The Committee therefore called "for shorter deadlines and for no sanctions to be imposed on the taxpayer until a binding decision is reached," he explained.
The European Commission estimates that there are currently around 900 double taxation disputes in the EU, involving more than EUR10.5bn (USD11.8bn).
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Finland on November 2, 2017, confirmed that a new DTA signed with Germany will be effective from January 1, 2018.
The DTA between Cyprus and Iran will become effective from January 1, 2018.
India ratified a third Protocol to its DTA with New Zealand on November 2, 2017, publishing a Notice in its Official Gazette.
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Barbados and Italy have exchanged instruments of ratification in respect of a DTA, which will now become effective from January 1, 2018.
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Spain and Portugal signed a DTA on October 18, 2017.
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Denmark and Japan signed a DTA Protocol on October 11, 2017.
The Bahamas and Finland signed a Protocol to amend their TIEA on October 19, 2017.
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The United Kingdom and Ukraine signed a DTA Protocol on October 9, 2017.
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Russia and Japan signed a DTA on September 7, 2017.
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