New arbitration arrangements to assist resolution of international tax disputes

New arbitration arrangements to assist tax disputes

Peter Madden and Glen Hutchings discuss new guidelines on the Mutual Agreement Procedure (MAP) and arbitration arrangements.

Glen Hutchings

Partner, Transfer Pricing

KPMG Australia


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dispute resolution

The Australian Taxation Office (ATO) has recently updated the guidelines on its website with regards to the Mutual Agreement Procedure (MAP) and arbitration arrangements to reflect the modifications made (or will be made) in some of Australia’s tax treaties made under the Multilateral Instrument (MLI).

Australia has had a good track record or relieving double taxation under its MAP processes. However, the process is often being resource intensive and drawn out without any certainty of ultimately reaching full double taxation relief.

The adoption of arbitration arrangements is a welcome step to a more efficient and robust international tax system. Further, for some treaty jurisdictions the arbitration arrangements may be available for current MAP cases on foot where companies have found the competent authority process to be delayed or just simply unable to resolve the matter.



As a background, BEPS Action 14 (minimum standard) seeks to improve the resolution of tax-related dispute between jurisdictions. Although many existing tax treaties have already contained a MAP provision to provide a process to resolve such dispute, further effort is required to ensure that access to MAP is available and that MAP cases are resolved within a reasonable timeframe and implemented quickly. Further, optional articles under Part VI of the MLI provide for an independent and binding arbitration where issues remain unresolved under the MAP.

The information on the ATO’s website provides guidance to common concerns of taxpayers who wish to understand the procedures to relieve double taxation or resolve treaty related tax disputes and issues in interpreting or applying a tax treaty under the MAP and arbitration.

To continue reading more about new arbitration arrangemnents visit KPMG Tax Now.

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