On 12 March 2024, the European Commission launched a targeted consultation giving stakeholders the chance to give feedback on the functioning of the EU’s framework to help resolve cross-border tax disputes for businesses and citizens in relation to double taxation issues.

Double taxation occurs when two or more countries claim the right to tax the same income or profits of a company or person. This can happen, for example, due to a mismatch in national rules or different interpretations of the transfer pricing rules in a Double Taxation Treaty (‘DTC’). This can cost businesses and citizens time and money to resolve.

The Directive on Tax Dispute Resolution Mechanisms or DRM (Directive (EU) 2017/1852) came into force on 1 July 2019 and introduced clearer rules and more stringent deadlines to resolve such cross-border tax disputes.

The general objectives of the DRM are to improve the EU business environment, help boost investment and the creation of jobs, and improve the confidence of business and citizens in public administration. The DRM focusses on the main stakeholder(s) affected by double taxation situations and broadened the scope of previous tools that focused mostly on transfer pricing and the attribution of profits to permanent establishments.

In accordance with Article 21 of the DRM, the Commission is now conducting a review and preparing a report on its functioning, with a focus on the Directive’s implementation in its first years. To this end, the Consultation launched on 12 March 2024 seeks to obtain stakeholders’ views.

The deadline for submission to this consultation is 10 May 2024.

Stakeholders can take part in the consultation by clicking here.