Journal of Legal, Ethical and Regulatory Issues (Print ISSN: 1544-0036; Online ISSN: 1544-0044)


Taxpayers' Rights in Mutual Agreement Procedure on the Basis of Double Taxation Treaties and the Brics Countries

Author(s): Belal Hassan Al-Rawashdeh

Taxpayers’ rights are of utmost importance in the context of the fundamental changes in the regulation of international tax relations determined by the necessity to combat tax avoidance at the global level. These changes create high level of uncertainty among taxpayers that might have negative effect on the economic development of states especially developing ones because of decrease of investment and entrepreneurial activities. Thus, contemporary states should provide high level of efficiency of dispute resolution mechanisms including mutual agreement procedure (MAP). It is the procedural mechanism allowing taxpayers to resolve theirs cases of taxation not in accordance with the provisions of double taxation treaties by the way of initiation of the communication between the competent authorities of contracting states that have concluded double taxation treaties. Based on the analysis of pros and cons of MAP, it might be stated that its attractiveness is not so obvious for taxpayers in the absence of certain guarantees such as the right to confidentiality or the right to be informed about the process of negotiation between competent authorities. The success of international community is only partial in this context because of the difficulty to find common denominator and the difference of interests at the global level. At the same time, the example of the EU demonstrates that the regional cooperation might be crucial in the improvement of taxpayers’ rights in the context of MAP that might be taken into account by the BRICS countries in their attempts to improve tax dispute resolution mechanisms.