The Treasury made the
Double Taxation Dispute Resolution (EU) Regulations 2020 on 22 January 2020. As it follows, the changes are determined by the requirement to implement the Council Directive (EU) 2017/1852 of 10 October 2017 on tax dispute resolution mechanisms in the European Union.
The regulations come into force on 14 February 2020, with effect, as required by the Directive, in relation to income earned or capital gained in a tax period of 12 months commencing on or after 1 January 2018.
The new rules might be applied for the resolution of tax disputes concerning the interpretation and application of bilateral double taxation treaties between the UK and the EU Member States if such interpretation or application result or might result in taxation not in accordance with the relevant provisions.
In addition to mutual agreement procedure, there is an opportunity to set up an Advisory Commission if the competent authorities could not reach the mutual agreement during two years. As it follows, it includes the representatives of the competent authorities as well as one independent person of standing for, and appointed by, each competent authority concerned or, if the Commissioners and each other competent authority agree, two independent persons of standing for, and appointed by, each of them.
The Advisory Commission must give an opinion on the resolution of the question in dispute within the period of 180 days.
It is noteworthy that the EU law shall be applicable to and in the United Kingdom during the transition period unless otherwise provided in the Agreement on the withdrawal of the United Kingdom of Great Britain and Northern Ireland from the European Union and the European Atomic Energy Community.
