Application of agreements reached between competent authorities regardless of domestic limitation periods
As a general rule, agreements reached between competent authorities in the context of a mutual agreement procedure are applicable regardless of the expiration of domestic statue of initiation
In the case of mutual agreement procedures conducted under a Tax Treaty, that will be the case where the applicable Tax Treaty includes a statement in that regard in its article relating to mutual agreement procedures (second sentence of Article 25, section 2 of the OECDMC).Therefore, the provisions of the specific applicable Tax Treaty will apply.
At present, few Tax Treaties in force in Spain do not include that provision and that number will be reduced with the application in Spain of the Multilateral Convention, which will introduce the provision into those which do not have it and which are affected by that convention, as it is a minimum standard under Action 14 of the OECD/G20’s BEPS Project.
However, it should be borne in mind that, in the event that the applicable Tax Treaty does not include that provision, once the domestic limitation period of any of the states affected by the mutual agreement procedure has expired, the agreement would not be applicable and, therefore, the mutual agreement procedure could conclude with an agreement not to eliminate the double taxation, in accordance with the provisions of Article 16.2.a) of the Regulation on Mutual Agreement Procedures.
This situation cannot occur in mutual agreement procedures conducted under the Arbitration Convention or the mechanisms provided for in the Directive (Articles 6(2) of the Arbitration Convention and Article 15(4), paragraph two, of the Directive).For that reason, those grounds for termination of the procedure are not provided for in the titles of the Regulation on Mutual Agreement Procedures regulating such procedures.