International
arbitration best way to settle double taxation disputes
Paris, 13
June 2000 - World
business tax experts have called on governments to accept compulsory international
arbitration to resolve cross-border tax disputes, particularly those arising
from conflicting interpretation of double taxation conventions.
The Taxation Commission
of the International Chamber of Commerce (ICC) recommended that compulsory and
binding arbitration in international tax disputes should be adopted in bilateral
or multilateral tax conventions.
The commission, whose members
are corporate tax specialists from leading international companies, said that
the 29-nation Organization for Economic Cooperation and Development (OECD) in
Paris would be an appropriate forum for developing such instruments.
The statement said that,
based on ICC's broad experience in commercial arbitration, members of the commission
believed that this form of dispute resolution was both attractive and effective.
"It presents significant advantages to businesses and governments.
"These include, not
only the cost-effective and equitable resolution of tax controversies, but also
the enhancement of global economic growth and development through elimination
of unintended instances of double taxation."
The statement drew attention
to perceived shortcomings, including delays and procedural conflicts, in the
mutual agreement procedure provided in most bilateral tax conventions as a means
of resolving disputes about their application.
"Binding and compulsory
arbitration can eliminate or alleviate many of these concerns. Arbitration always
reaches a conclusion, provides for impartial determinations with proper taxpayer
participation, and applies law rather than expediency. While arbi
tration may
also present delays, the process is orderly, predictable and transparent."
Commission
on Taxation