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Guide to mutual agreement procedures

d.4 The question to which the procedure relates does not exist or ceases to exist

Once the request for initiation has been accepted and the question submitted to the competent authorities has been analysed, those authorities may agree that there is no double taxation or taxation that is not in accordance with the convention.

Equally, even where double taxation or taxation not in accordance with the convention exists initially, it may be the case that the adjustment giving rise to such taxation is cancelled by a final decision or judgement of an administrative Tribunal or court.In that case, the question to which the procedure relates would have disappeared.

In both cases, the requirements established for conducting the mutual agreement procedure are not satisfied, since the article of the applicable Tax Treaty relating to such procedures requires the existence of taxation that is not in accordance with the Tax Treaty, and Articles 4 and 6 of the Arbitration Convention implicitly require the existence of double taxation.The mutual agreement procedure can, therefore, be terminated. The decision must be notified to the taxpayer, but there is no need to request their acceptance of it.

Termination in such circumstances is expressly provided for in Article 52 of the Regulation on Mutual Agreement Procedures for procedures conducted under the Directive.