OECD Arbitration in Tax Treaty Law

1. S. 359Introduction

This paper is aimed at showing a whole, general picture of the tax treaty arbitration functioning in the US and reviews its selected tax treaties with an arbitration clause. It refers to voluntary and mandatory arbitration clauses, however, the main focus is on mandatory arbitration provisions. The work provides a wide description of the tax arbitration importance and peculiarities.

Treaties with Germany, Belgium, France, and Canada include mandatory arbitration clauses. The treaties and protocols that are aimed at amending them are supplemented by the most comprehensive procedural rules among the US tax treaties.

The rules are available in the Memorandums of Understandings (MOUs) signed by States, arbitration board operating guidelines, and technical explanations. The latter are unilateral US documents with detailed explanations on applying tax treaty arbitration in practice.

US tax treaty arbitration provisions can be especially useful for the reader because the US has the longest experience in this matter as this is a country that concluded the first treaty with an arbitration clause with Germany in 29 August 1989.

In the introduction, this paper provides brief inform...