The Arbitration Convention of the European Union (EU) establishes a procedure for settling transfer pricing disputes for EU member states. This procedure may apply in cases of double taxation between companies in different EU Member States. A proposal to adapt to Article 25 of the MODEL UN Convention on Double Taxation between Developed and Developing Countries1 (UN Model Convention) is a very important procedure for the implementation and implementation of bilateral treaties on the basis of the model convention. It provides for the establishment of a “mutual agreement procedure” (POP) allowing the contracting parties to better apply the physical provisions provided for them and which allocate the tax duties. The POP is managed by the “competent authorities,” which are generally referred to in Article 3, point e), treaties on the basis of the UN Model Convention. It is very important to identify those designated as competent authorities. They usually come from the ministry or the tax administration (i.e.dem competent branch of the governments of the contracting states). These are the people normally responsible for administering the treaty and the Article 25 mutual agreement procedure establishes the agreed rules and principles to ensure that the treaty`s tasks are properly respected. The role of the competent authorities in Article 25 is to resolve “by mutual agreement” any difficulty or doubt as to the application of the treaty. It applies to all articles of the convention. Under the POP, the appropriate authorities are only required to exercise due diligence.
If states fail to reach an agreement, the mutual agreement process will be closed without eliminating double taxation. In this case, the situation of the subject is settled in each state. Dispute resolution under double taxation agreements is dealt with under Article 25, which deals with the Mutual Agreement Procedure (POP), which provides for a mechanism for resolving cross-border tax disputes related to double taxation and double non-taxation. The Committee of Experts on International Tax Cooperation has provided little or no experience to countries with little or no experience in a practical guide to this procedure. Drawing on the OECD Manual on Effective Agreement Procedures (MEMAP), it builds on the provisions of the UN Convention on Double Taxation between Developed and Developing Countries (Update 2011) and aims to present the various aspects of the mutual agreement procedure from the perspective of countries with limited experience in this procedure. Profits reported in one state on the basis that the other state has made a correction with respect to the same income or profits To be valid, the application should contain the following information and documents: The POP only includes taxes expressly mentioned in the agreement: income tax, corporate tax, corporation tax, general social contributions, general social security contributions , social security contributions, wealth tax, wealth tax, death bonds, accordingly. Details of the administrative means put in place and possible judicial decisions in this case However, late interest, penalties and mark-ups are not covered by the POP. The POP is based on a first written phase between the relevant authorities, during which the tax authorities set out their respective positions, followed by a second phase of negotiations at joint committee meetings. As a result, the POP is subject to the application of a prior administrative measure.