The double taxation agreement is available on the website of the Federal Ministry of Finance. As a general rule, the application must be submitted within a time frame set by the DBA. If the applicable DBA does not set a deadline for applications, a deadline is indicated in the Memorandum on Mutual Agreement Procedures (subsection 2.2.3). BMF letter of October 9, 2018, leaflet on reciprocal international agreements and income and wealth tax arbitrations. This notice replaces the notice of July 13, 2006 – IV B 6-S 1300-340/06 -, BStBl I 2006, p. 461. The provisions of the letter of BMF of 5 April 2017 – IV B 5 – S 1304/0-04 – BBl I 2017, 707 are contained in paragraph 5 of the notice of 9 October 2018. Changes to the previous brochure include paragraph 1.1.3 (the scope of the EU Arbitration Agreement), paragraph 1.4 (coordinated by the competent authority) and paragraph 2.2.2 (information on the deadlines for filing applications in double taxation conventions). The mutual agreement procedures mentioned here are administrative procedures based on the application between two countries. They protect the taxpayer`s right to be taxed under a double taxation agreement (DBA). A DBA is an agreement between two countries that regulates, among other things, the transfer of the right to tax income generated by borders (for example. B, residence in one country and income from the other country).
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. 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. In particular, Article 19 of the compulsory arbitration procedure must be mandatory if the competent authorities are unable to reach an agreement on the settlement of a case within two years of their start.
This is a significant restriction on POPs cases in the past, as the competent authorities were only required to try to resolve cases and disputes could be resolved indefinitely. Section 19 ensures that treaty disputes will be resolved within a specified time frame, making the MAP a more attractive option for taxpayers. In addition, sections 20 to 25 provide for the practical functioning of arbitration. In the past, it was often practical constraints or a lack of agreement on how to proceed that blocked the solution. Requests for mutual agreement under a DBA or the European Arbitration Convention can be made at: For more information on the filing of a POP application and exceptions for individuals, please refer to Chapter 3.4 of the Tax Administration Guidelines on Mutual Agreement procedure in the event of an international tax dispute. Procedure of Mutual Agreement (MAP) – is the procedure implemented within the framework of international treaties and applied by the competent authorities in consultation with the interpretation and application of the provisions of the tax treaties or the Convention on the Elimination of double taxation in relation to the adjustment of the profits of associated companies (arbitration agreement) when a tax subject is taxed outside the scope of the tax treaties or the convention to deal with the issue of the elimination of double taxation.