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Guide to mutual agreement procedures

Rights of the taxpayer in the mutual agreement procedure

The mutual agreement procedure is an inter-state procedure as the Commentaries to Article 25 of the OECD Model Tax Convention.

According to Article 3 of the Regulation on Mutual Agreement Procedures, the rights of the taxpayer in relation to the mutual agreement procedure are as follows:

  • Requesting initiation of the mutual agreement procedure.

  • Being informed regarding the progress of the procedure on the terms set out below.

  • Being heard in relation to the case.

Furthermore, the above-mentioned regulation establishes the taxpayer’s right to accept or reject the agreement reached between the competent authorities.

The information provided will always be succinct and will always respect the confidential nature of negotiations between the competent authorities.

In any event, it should be borne in mind that the taxpayer is not entitled to be informed of the content of the positions exchanged by the states in the course of a mutual agreement procedure.

For their part, taxpayers must provide the tax authorities with whatever details, reports, background information and evidence may be necessary to settle the case.That information and documentation must be complete and accurate and must be provided to the tax authority requesting it within the time limit specified.At the arbitration stage of the mechanism provided for in the Directive, the provision of any information, evidence or documents that may be relevant to the decision of the advisory commission and which have not been provided to the competent authorities will require the approval of the competent authorities of the Member States concerned, except where provided at the request of the advisory commission.