Mutual agreement does not have precedential value

Agreements reached between the competent authorities of different states within a mutual agreement procedure do not constitute a precedent that may be invoked either by the taxpayer or the tax authority. Their purpose is exclusively to eliminate the possible double taxation, or taxation not in accordance with a convention, that may have arisen as a result of the actions of those authorities.

In that regard, the communication to the taxpayer regarding the agreement reached between the competent authorities, the closing letters between the competent authorities and the communication to the relevant office regarding the implementation of the agreement, include a text similar to the following:

'Neither the Tax Administration nor the taxpayers shall consider this case as setting precedent as regards other adjustments or issues which may arise in the future, or for discussions between competent authorities concerning the same or similar issues relating to different taxpayers.'