a. Position paper

In mutual agreement procedures initiated under any of the three legal instruments (Tax Treaty, Arbitration Convention and Directive), when the competent authority that receives the request considers that it is well-founded, but that it cannot find a solution acting by itself, it will inform the competent authority of the other state that the initiation of the procedure has been allowed and that the request was submitted within the required time limit, and it will attach the documentation relating to the case. The bilateral stage of the mutual agreement is thus initiated.

At the bilateral stage, the competent authority of the state that has taken the measure that allegedly goes against the international convention or treaty providing for the elimination of double taxation of income and, where applicable, capital normally issues an initial document in which it states its position regarding the case.

For that, the Spanish competent authority may request whatever documentation and reports it considers appropriate. As a general rule, these documents must be sent within three months of receipt of the request. However, when the competent authority requests additional information from the taxpayer, it must be provided within ten days (which may be extended by five days), starting from the day following notification of the request, unless a different time limit is specified in the request itself (Article 12.2 of the Regulation on Mutual Agreement Procedures).

In the case of mutual agreement procedures conducted under the mechanism established in the Directive, taxpayers receiving the requests referred to in this section will have to send their response, simultaneously, to all competent authorities of the Member States concerned, except where the person requesting the procedure:

• is an individual; or

• is not a large undertaking and does not form part of a large group, in accordance with Article 3(4) and (7) of Directive 2013/34/EU of the European Parliament and of the Council of 26 June 2013,

  in which case the response may be submitted solely to the Spanish competent authority, which, within two months of the date on which the response is received by its register, will send a notification, simultaneously, to the competent authorities of the other Member States concerned, together with a copy of the information submitted. The information will be deemed to have been received by all of the states concerned on the date on which it is received by the register of the competent authority.

Failure on the part of the taxpayer to comply with such a request may result in the procedure being terminated.

The competent authorities will exchange as many position papers as are necessary in order to try to reach an agreement.