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What Is Mutual Agreement Procedure

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Requests to open a procedure for mutual agreement under a DBA or the European Arbitration Agreement can be addressed to the BZSt at the following address: letter from BMF of 9 October 2018, leaflet relating to international mutual agreement and arbitration on income and property taxes. This notice replaces the notice of July 13, 2006 – IV B 6-S 1300-340/06 -, BStBl I 2006, p. 461. The provisions of the letter of BMF of 5 April 2017 – IV B 5 – S 1304/0-04 – BBl I 2017, 707 are contained in paragraph 5 of the notice of 9 October 2018. Changes to the previous brochure include paragraph 1.1.3 (the scope of the EU Arbitration Agreement), paragraph 1.4 (coordinated by the competent authority) and paragraph 2.2.2 (information on the deadlines for filing applications in double taxation conventions). The mutual unification process is a proven way of consulting with tax authorities to resolve disputes over the application of double taxation agreements. This procedure, described and approved in Article 25 of the OECD Model Convention, can be used to eliminate the double taxation that could result from an adjustment in transfer prices. Where measures taken by one or more countries lead to non-DBA taxation (particularly in the area of double taxation), the taxpayer concerned may request a procedure of mutual agreement. In Germany, the Bundeszentralamt for Steuern (BZSt) is responsible for the implementation of these procedures. If all the conditions are met, the countries concerned try to resolve the tax dispute by mutual agreement.

This will generally avoid double taxation. The legal basis for a mutual agreement procedure is the DBA concerned. Germany has concluded DBA with more than 90 countries in the world. Most of these DBAs follow the OECD`s draft international agreement. The provisions on mutual agreement procedures are set out in Article 25 of the OECD Model Convention. Recent ABA often contains provisions that prescribe arbitration through an unsuccessful mutual agreement procedure. The OECD publishes, by mutual agreement, statistics on the procedures of OECD member countries under the framework of `POP statistics`. In the international tax system, the Mutual Agreement (MAP) procedure – in Australia`s tax treaties – supports a resilient global economy and stimulates economic growth. POPs can help: under the POP, the competent authorities are only required to do due diligence.

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