Tax Treaty Case Law around the Globe 2018

S. 413Chapter 34 Spain: Taxpayers’ Rights, Corresponding Adjustments and the Right to Initiate MAPs and Arbitration

Adolfo Martín Jiménez

34.1. Introduction

Access to mutual agreement procedures (MAPs) has always depended on the acceptance of the competent authorities and the legislation or practices in the specific countries. It is therefore not rare to see countries where the right to initiate MAPs (and, eventually, arbitration procedures) depends on a policy decision and/or the goodwill of the competent authorities. As any act adopted in systems where the rule of law prevails, decisions of competent authorities should be subject to judicial control.

In this regard, the judgment of the Spanish National Court, is very important. It not only shows that the decisions of competent authorities can be judicially controlled and should be justified, but has also established an important limit to denials of MAP access in cases where domestic tax authorities have concluded that there is abuse or avoidance under domestic law, but still there is double taxation as a consequence of the conclusion that a specific behaviour is regarded as abusive under domestic legislation. The facts of the decision (sec...