Council expected to approve EU-wide tax dispute resolution system

The EU’s Economic and Financial Affairs Council is expected to approve a directive establishing an EU-wide system for resolving double taxation disputes at its meeting of October 10.

Ministers will also hear a presentation by the Commission about its proposed strategy for digital taxation, aimed at closing loopholes that allow digital companies to escape taxation. The Commission will also present a proposal on rules for a definitive VAT system, aimed at making it more simple, fraud-proof, and business-friendly.

The dispute resolution directive aims to improve access to and the effectiveness of the mutual agreement procedure (MAP) and establish procedures for dispute resolution by arbitration. Taxpayers are permitted to initiate a MAP and Member States are given two years to reach an agreement to resolve the dispute. The new arrangement calls for an arbitration procedure if the mutual agreement procedure fails which will result in a decision that is binding on the Member States.



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