Mandatory Arbitration of International Tax Disputes: A Solution in Search of a Problem

Abstract:     
Many commentators have addressed the question of resolution of international tax disputes through various alternative mechanisms. The most debated question is whether or not to introduce mandatory arbitration into the bilateral tax treaty network and if yes, how can this be accomplished. From a first glance at the extensive literature that exists in this field, it appears as if an additional contribution is not an easy task to fulfill. Nevertheless, recent developments deserve further investigation, namely, the recent efforts by the Organization of Economic Development and Cooperation ("OECD") to include a provision addressing mandatory and binding arbitration in its Model Convention and the recently ratified protocols by the United States with Germany, Belgium and Canada which, inter alia, brought the inclusion of such a clause to the Double Tax Treaties (DTTs). I wish to examine these proposals and predict the probability of their success.

Number of Pages in PDF File: 64

Keywords: International Taxation, Arbitration in Taxation, OECD, Mandatory Arbitration, International Tax Disputes, Mutual Agreement, Competent Authority, Arbitration, Tax Treaties

JEL Classification: K34, K33, K00

working papers series