e. Who can request to initiate a mutual agreement procedure?

Conducted under the applicable Tax Treaty:

Any person resident in Spain according to the applicable Tax Treaty and who has been subject to taxation in manner not in accordance with the applicable convention may request that the Spanish competent authority initiate the mutual agreement procedure. In the case of transfer pricing, the counterparty in the transaction, adjusted giving rise to double taxation, may also submit the request.

Under to the Tax Treaties, the party making the request must be a ‘person’ in accordance with the applicable Tax Treaty. Under Article 3 of the OECDMC (the model followed by the majority of the Tax Treaties signed by Spain), persons are individuals, companies and any other body of persons.

Accordingly, for example, a permanent establishment of a Canadian company in Spain, which is not regarded as a person under the Spain/Canada Tax Treaty, cannot request a mutual agreement procedure under this treaty.

Conducted under the Arbitration Convention:

Any person resident in Spain and subject to double taxation arising from a transfer pricing adjustment may request the initiation of the mutual agreement procedure, even if double taxation arises from an adjustment applied in the other Member State to the counterparty in the transaction. Furthermore, permanent establishments of entities resident in the other Member State may also request the initiation of the mutual agreement procedure.

Conducted under the Directive:

The Directive provides that any affected person may submit the request and it defines such a person, in Article 2(1)(d) as ‘any person, including an individual, that is a resident of a Member State for tax purposes, and whose taxation is directly affected by a question in dispute’. Therefore, under the Directive, permanent establishments of entities resident in other Member State cannot submit a request for a mutual agreement procedure.