Alternative dispute resolution on the rise in the EU
The Council of the European Union is once again making efforts to promote and expand out-of-court dispute resolution in the European Union. To this end, the Council adopted Directive (EU) 2017/1852 of October 10, 2017 on procedures for the settlement of tax disputes in the European Union. According to this directive, conflicts regarding the taxation of income and assets from different member states that are subject to a double taxation agreement should, where possible, be resolved in an out-of-court dispute resolution procedure. Recital 6 of the Directive states this:
“The settlement of disputes should apply to differences in the interpretation and application of bilateral tax treaties and the Union Convention on the elimination of double taxation, and in particular to differences in interpretation and application leading to double taxation. This should be achieved by means of a procedure in which, as a first step, the tax authorities of the Member States concerned are seized of the case so that they can resolve the dispute in a mutual agreement procedure. Member States should be encouraged to use non-binding alternative dispute resolution procedures such as mediation or conciliation during the final stages of the mutual agreement procedure period. If no agreement is reached within a certain period, a dispute settlement procedure should be initiated. There should be flexibility in the choice of dispute resolution method, which could be either ad hoc structures or more permanent structures…”
The text of Council Directive (EU) 2017/1852 of October 10, 2017 can be found here.
