OECD Arbitration in Tax Treaty Law

1. S. 545Introduction

The existence of domestic remedies is a consequence of the constitutional right of access to justice and the rule of law. Domestic remedies can be also derived from human rights that guarantee access to a fair and public hearing, within a reasonable time and by an independent and impartial tribunal established by law. To ensure the protection of these rights in international law, international dispute resolution mechanisms were developed in different fields, such as in investment treaties and trade agreements. In the context of international tax law, taxpayers may request that states enter into a mutual agreement procedure (MAP) in order to ensure that double taxation is effectively avoided, without expressly obliging the taxpayer to renounce access to domestic remedies. As a result, taxpayers have recourse to both domestic and international procedures.

The relationship between the two is not always clear. As income tax treaties (tax treaties) do not forbid the taxpayer from renouncing its right to domestic remedies, while accessing the MAP, there are no uniform standards as to what should happen if there is a simultaneous procedure at the domestic level and at the in...