Arbitration Convention 90/436/EEC: Inapplicability in Case of Serious Penalties
/Autore: Piergiorgio Valente
A tool for settling transfer pricing controversies is the EU Arbitration Convention No. 90/436/EEC. If a double taxation in transfer pricing occurs, the enterprise may submit its case to the competent authority of the state in which it resides, regardless of the remedies provided by domestic provisions. Where the claim is legitimate, the competent authority shall initiate a mutual agreement procedure (MAP) with the authority of the other state to settle the controversy. If no agreement is reached within two years, the controversy shall be submitted to an advisory Commission charged with the delivery of an opinion. The competent authority of a state shall not be obliged to initiate a MAP or set up an advisory Commission should the enterprise be liable to serious penalties.
