International Tax Developments
On 23 May, the EU Council agreed on a proposed directive designed to improve the mechanisms used for resolving disputes between Member States arising out of double tax treaties. In summary, the draft directive provides for a 'mutual agreement procedure' to be used under which the relevant Member States must reach an agreement on the matter within two years. If no agreement is reached within the two year time limit, an arbitration procedure will then be used to resolve the dispute within specified timeframes.
The next steps involve the draft directive being reviewed by the European Parliament. Once the European Parliament gives its opinion on the draft directive, it can then be formally adopted by the EU Council.