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international working Committees
IAFEI INVITATION BY ThE Eu COMMIssION TO pARTICIpATE
TO ThE puBLIC CONsuLTATION ON IMpROVING
DOuBLE TAXATION DIspuTE REsOLuTION MEChANIsM
AND ANsWER BY IAFEI INTERNATIONAL TAX COMMITTEE
by
PIERGIORGIO VALENTE
,
Chairman IAFEI International Tax Committee
and
EMILIO PAGANI,
Assistant to the IAFEI Chairman, May 15, 2016
On April 11, the IAFEI submitted its contribution to the EU
Consultation on Improving Double Taxation Dispute Reso-
lution Mechanisms launched by the EU Commission on
February 16, 2016.
This contribution represents an important step to heighten
the visibility of IAFEI at both, international and European
levels, and have its voice heard by the main players of the
international tax arena. This contribution follows other In-
ternational Tax Committee’s initiatives such as our previous
contribution submitted on September 8, 2015 on the EU
Public consultation on further corporate tax transparency,
and is part of our Committee’s International Tax Priorities
for 2016 (i.e.: share IAFEI’s opinion/position with regard
to EU measures and latest developments in the tax policy
area [i.e. EU Action Plan to tackle tax evasion and fraud;
transparency and tax Avoidance packages; CCCTB]; assess
and analyze potential implications and effects of the new
tax framework for EU and Non-EU Companies and their
CFOs). Our aim, within the Committee, is to reflect our
Members’ concerns, using our best endeavors to achieve
a better, clearer and more efficient tax framework, for the
benefit of all stakeholders.
In light of the above, IAFEI’s International Tax Committee
took the lead to prepare such contribution taking into
consideration the significance of the topic for all players.
Double Taxation is an authentic and cumbersome burden
for our companies.
As such, it is of the utmost importance that present di-
spute resolution mechanisms be improved. The system as
currently designed presents some inefficiencies and might
create some disadvantages, hindering also investment op-
portunities and cross-border economic activity, while in-
creasing compliance costs.
As we pointed out in our contribution, “
With the imple-
mentation of the newmeasures [set to counteract tax eva-
sion and fraud], we foresee a potential increase of double
taxation and on the number of tax disputes.
TRANSFER PRICING related disputes will also most likely
increase as well. The current insufficiency of dispute reso-
lution mechanisms is self-evident, and it often acts as a de-
terrent for our foreign investment decisions
”.
The consultation at issue is part of the EU scheduled work
within the Action Plan for a Fair and efficient Corporate tax
system, released back in June 2015, and it was drawn up
with the aim of gathering stakeholders’ contributions on:
a) the need and importance of removing double taxation
for companies carrying out cross-border activities;
b) the effectiveness of existing tools to solve double taxa-
tion within the European Union;
c) ways of improving such mechanisms.
This EU initiative is to ensure a coordinated EU approach
to dispute resolution among Member States, through a
clearer framework that includes more stringent timelines.
The EU proposal is to build on the systems already in pla-
ce and to find efficient ways of strengthening the enforce-
ment of such mechanisms while improving efficiency.
We, within the International Tax Committee, stressed the
need to ensure that:
- existing mechanisms are actually able to solve double
taxation since they are in our opinion insufficient as far as
scope, enforceability and efficiency are concerned
- double taxation be effectively removed
- the mechanisms under EU Tax treaties network be re-
viewed accordingly (mandatory binding arbitration should
be ensured)
- the need of ensuring a timely resolution.
Furthermore, we emphasized that “
for CFOs, it is of the
utmost importance ensuring the taxpayer’s involvement
within the procedure. Further transparency is desirable, as
well as timely updates and reports to taxpayers involved.
We need efficient and clear tools to eliminate/resolve dou-
ble taxation; as well as the assurance of timely correspon-
ding adjustments
”.
We hope that the other important IAFEI Technical Com-
mittees be able to operate this way because our Associa-
tion needs to be better known in the international contest.
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