The European Commission welcomes EU Member States’ formal green light for new rules to better resolve tax disputes.
“We proposed this new system to improve legal certainty and EU competitiveness by creating a binding obligation on Member States’ authorities to resolve tax disputes in a timely manner. This is an important step to allow EU citizens and businesses alike to have fair tax treatment. I commend the quick action of Member States and the European Parliament to support this upgrade of the current rules.” Said Pierre Moscovici, Commissioner for Economic and Financial Affairs, Taxation and Customs.
The decision taken by EU finance ministers at the ECOFIN Council meeting in Luxembourg today will ensure that businesses and citizens can resolve disputes related to the interpretation of tax treaties more swiftly and effectively. It will also cover issues related to double taxation – a major obstacle for businesses, creating uncertainty, unnecessary costs and cash-flow problems. Double taxation refers to cases where two or more countries claim the right to tax the same income or profits of a company or person. It can occur, for example, due to a mismatch in national rules or different interpretations of a bilateral tax treaty with regards transfer pricing arrangements. The improvements to the current rules agreed by EU finance ministers in Luxembourg will give taxpayers much more certainty when it comes to seeking resolution to their interpretation of tax treaties or double taxation problems.