The mutual agreement procedure is designed to determine the tax debt between two countries. The partners in the process are therefore the contracting countries concerned. The applicant herself is not part of the proceedings. However, the applicant is regularly informed of the status of the procedure and the status of the procedure. In the vast majority of cases, countries reach an agreement. Some might argue that arbitration has the advantage of encouraging Member States to settle disputes before the two-year deadline expires, which would be a success rather than a failure of the convention. However, statistics also show that 202 cases had exceeded the two-year deadline, while it had been cancelled with the taxpayer`s consent. This indicates that taxpayers do not always view the arbitration available to them under the agreement as a desirable means of resolving double taxation. Where measures taken by one or more countries lead to non-DBA taxation (particularly in the area of double taxation), the taxpayer concerned may request a procedure of mutual agreement. In Germany, the Bundeszentralamt for Steuern (BZSt) is responsible for the implementation of these procedures. If all the conditions are met, the countries concerned try to resolve the tax dispute by mutual agreement. This will generally avoid double taxation.
The BZSt does not collect royalties for mutual agreement procedures (with the exception of prior price agreements; see fact sheet on advance price agreements). The double taxation agreement is available on the website of the Federal Ministry of Finance. The objective of the POP is to eliminate either double taxation or taxation that does not comply with the applicable convention. Double taxation can be legal (if the same tax is taxed on the same income in two states) or economic (if the taxation of a taxpayer`s income in one state doubles the taxation of the income of another taxpayer bound to the former in another state. This is particularly common for profit transfers between companies of the same group of equals). The mutual agreement clauses of most DBAs contain specific deadlines for submitting applications. The double taxation agreement is available on the website of the Federal Ministry of Finance. There are clear and often long delays in applying for the POP. In particular, Article 16, paragraph 1, second sentence, provides that the MAP case must be brought within a specified period of time, i.e. less than three years from the first notification of the tax measure, and not in accordance with the provisions of a secure tax treaty. This means that taxpayers are not able to present their arguments within three years of the first notification of the tax measure leading to taxation, in accordance with the provisions of the secured tax treaty. The first return is generally considered the final assessment at the end of a tax collection or other.
VAT (VAT) must be paid for the purchase of goods and services in many countries. The VAT refund procedure offers businesses, embassies/consulates and international organisations the … An application under the European Arbitration Agreement must contain the information and documents necessary for the procedure and be forwarded to the BZSt in three copies.