Our previous article highlighted the uncertainty surrounding the impact of the UK’s departure from the EU on access to EU-specific mechanisms for relieving double taxation. As this article explains, it has just been confirmed that those options will cease to be available unless a request has been submitted before 31 December 2020.
As the number of disputes with tax authorities increases, businesses should be prepared for the growing possibility that they will be facing double taxation. This might be resolved by making a Mutual Agreement Procedure (MAP) claim under a double tax treaty or in disputes involving an EU Member State, there has been separate access to arbitration under the EU Arbitration Convention or the EU Dispute Resolution Directive.
The MAP enables two (or more) tax authorities to seek to resolve the double taxation through discussion and correspondence. While there is no time limit for how long this process can take, many of the UK's bilateral tax treaties, but not all, include a provision for setting up an arbitration panel if the dispute is not resolved within two years.
Where the double taxation is between the UK and an EU Member State, then as well as making a claim under the appropriate bilateral tax treaty, it has been possible to date to make a claim under either: