Even in the event of an arbitration request, the EU review found that there could be many shortcomings in the system, including delays or lack of setting up the advisory committee and the lack of agreement on the appointment of the chairman of the advisory committee that delays or prevents the procedure. Action 14 of the BEPS Action Plan aims, in particular, to improve the effectiveness of the Mutual Agreement Procedure (POP) in the settlement of contractual disputes and transfer pricing. A proposal for adjustment in the case of an adversarial adjustment procedure When measures by one or more countries lead to a non-DBA tax (particularly in the area of double taxation), the subject concerned may request a procedure of mutual agreement. In Germany, the Bundeszentralamt for Steuern (BZSt) is responsible for the implementation of these procedures. If all the conditions are met, the countries concerned try to resolve the tax dispute by mutual agreement. This will generally avoid double taxation. The memorandum contains detailed information on how reciprocal procedures and arbitration procedures are conducted in Germany. 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). The double taxation agreement is available on the website of the Federal Ministry of Finance.

Tax treaties protect taxpayers by prohibiting or limiting a country`s ability to tax, tax or limit revenues from certain cross-border transactions. If a country`s action violates such contractual obligations under its domestic law, taxpayers can use MAP to enforce the contract restriction. This can be done either because a country has attempted to impose withholding tax on certain incomes when it is not possible to exercise such a right to taxation, or because tax rates exceed the rates allowed by the current tax treaty. It can also occur when one country tries to tax non-residents on the basis of the existence of a stable institution, when the other country does not think there is an institution. A POP can be invoked by taxpayers so that one country, in agreement with the other country, can eliminate cases of double taxation resulting from the actions of the tax administration in the other country. In the international tax system, the Mutual Agreement (MAP) procedure – in Australia`s tax treaties – supports a resilient global economy and stimulates economic growth. The MAP can help: the Mutual Agreement Procedure (MAP) is an out-of-court procedure, independent of internal remedies. It is intended to eliminate double taxation of taxpayers. BZSt`s jurisdiction with respect to mutual agreement procedures, Arbitration and APAs Thus, multinational companies facing cross-border disputes are well advised to proactively review the use of POPs (as well as other alternative dispute resolution mechanisms, such as bilateral pre-price agreements – APAs) when available, while pursuing their options in the usual domestic channels.