Use Of Mutual Agreement Procedure

The mutual agreement procedure (POP) is a negotiated procedure between the competent authorities of the States parties to a tax treaty. Their purpose is to resolve interpretative disputes and eliminate double taxation. The agreement clauses of most A.A. provide for specific deadlines for the filing of applications. The double taxation agreement is available on the website of the Federal Ministry of Finance. Taxpayers who consider that their taxation is contrary to a DBA or the European Arbitration Convention may request a cartel procedure. In Germany, the Bundeszentralamt für Steuern (BZSt) is the competent authority for the implementation of these procedures. Requests for the opening of a mutual agreement procedure can therefore be submitted directly to the BZSt. As a general rule, applicants not established in Germany must submit such applications to the competent authority of their country of residence.

Requests for the opening of mutual agreement proceedings under a DBA or the European Arbitration Convention may be addressed to the following address of the BZSt: Specifically, Article 19 MLI provides that a binding arbitration procedure must be mandatory if the competent authorities are unable to reach agreement on the settlement of a case within two years of its commencement. This is an important restriction in POPs cases in the past, as competent authorities were only required to try to resolve cases and disputes could not be resolved indefinitely. Article 19 ensures that disputes related to the contract will be settled within a set period of time, making it a more attractive option for taxpayers. In addition, articles 20 to 25 set out the manner in which arbitration proceedings are to be conducted in practice. In the past, it was often practical restrictions or a lack of consensus on how to proceed that blocked the solution. In addition, the European Arbitration Convention provides for a procedure for agreeing on the distribution of profits between affiliated undertakings and permanent establishments. . . .