The Dispute Resolution Mechanism (DRM) Directive (2017/1852) provides for a new system for resolving double taxation disputes between EU Member States. The Directive, which was transposed into Irish legislation through the European Union (Tax Dispute Resolution Mechanisms) Regulations 2019 (S.I. No. 306 of 2019) and the European Union (Tax Dispute Resolution Mechanisms) (Amendment) Regulations 2020 (S.I. No. 673 of 2020), strengthens the mechanisms used to resolve disputes that arise from the interpretation of agreements on the elimination of double taxation.
The Directive requires that each Member State nominate independent persons of standing to serve on ad-hoc advisory commissions. The European Commission maintains the list of independent persons of standing and the list consists of all the independent persons nominated by Member States. Ireland is entitled to nominate at least three such persons.
The Minister for Finance now invites expressions of interest from individuals who are competent and independent, and who can act with impartiality and integrity, to serve as independent persons on the EU list.
Candidates will need to demonstrate a deep understanding of complex tax matters in respect to corporate, income and capital taxes including the interpretation and application of double taxation treaties, and tax treatment of cross-border transfer pricing. An advanced legal or taxation qualification, and experience at a senior level in a relevant business, professional practice, or tax administration role would be an advantage. Full details of the role of independent persons of standing are detailed in the Directive[1] and applicants are expected to satisfy themselves that they meet all of the eligibility criteria.
Following consideration of the expressions of interest received, a process to select the persons concerned will be undertaken. The persons selected will be nominated for inclusion in the list of independent persons of standing to be maintained by the European Commission.
A selection panel to assist with the process will be established. This panel will be comprised of officials from the Department of Finance and the Office of the Revenue Commissioners and an independent external expert.
The Directive includes safeguards in respect to the independence of the persons of standing. These safeguards are set out in Article 8(4) of the Directive and will be considered by the selection panel.
Remuneration for the role is detailed in Article 12 of the Directive.
Any individual who wishes to nominate themselves and believe that they meet the criteria should apply with a statement of suitability and curriculum vitae (covering professional and academic background, competence and expertise, and any potential conflicts of interest) to DRMnominee@finance.gov.ie by 12pm on Wednesday 27 January 2021.
Any queries can be directed DRMnominee@finance.gov.ie.
Notes
BEPS Action 14 called for effective dispute resolution mechanisms to be introduced. Following the agreement of BEPS Action 14, Ireland, together with other Member States, agreed the Directive on Dispute Resolution Mechanisms to extend the availability of arbitration when two Member States disagree on how, and where, a taxpayer should be taxed.
This was adopted by the European Council in December 2017.
Full text of the Dispute Resolution Mechanism (DRM) Directive (2017/1852)
https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32017L1852&from=EN
Background information on the resolution of tax disputes in the European Union https://ec.europa.eu/taxation_customs/business/company-tax/resolution-double-taxation-disputes_en_en#heading_3
What is the rationale for the dispute resolution mechanism?
Situations where different Member States tax the same income twice create serious obstacles to doing business across borders. This can create an excessive tax burden, can cause economic distortions, and have a negative impact on cross-border investment.
How will the dispute resolution mechanism work?
The new directive on tax dispute resolution mechanisms should help to better resolve tax disputes because Member States will now have a legal duty to take conclusive decisions:
- Taxpayers facing tax disputes that arise from bilateral tax agreements or conventions that provide for the elimination of double taxation can now initiate a mutual agreement procedure whereby the Member States in question must try to resolve the dispute amicably within two years.
- If no solution has been found at the end of this 2-year period, the taxpayer can request the setting up of an Advisory Commission to deliver an opinion. If Member States fail to do this, the taxpayer can bring an action before its national court and force Member States to act.
- This Advisory Commission will be comprised of three independent members appointed by the Member States concerned and representatives of the competent authorities in question. It must deliver an opinion within 6 months, which the Member States concerned must carry out unless they agree to another solution within the 6 months following the opinion.
- If the decision is not implemented, the taxpayer who has accepted the final decision and renounced his right to domestic remedies within 60 days from notification may seek to enforce its implementation before the national courts. Member States are obliged to notify taxpayers and publish the full final decision or an abstract.
[1] Full text of the Dispute Resolution Mechanism (DRM) Directive (2017/1852)
https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32017L1852&from=EN
Contact:
Aidan Murphy, Press Officer, Department of Finance – 085 886 6667