The UK and Guernsey have signed a memorandum of understanding setting out how the arbitration process under article 25(5) of the UK/Guernsey Double Taxation Agreement (DTA) will be applied. This relates to the ‘mutual agreement’ part of the DTA, which covers situations where it is unclear which territory has the taxing rights. The principle enshrined in Article 25 is that the tax authorities of both jurisdictions will work together to mutually agree a solution.
Article 25(5) deals with arbitration, where it has not been possible for the tax authorities to reach agreement.
Alongside various administrative requirements, including for the provision of necessary information, the MOA sets out a number of key points:
Deadlines for both tax authorities to identify the issues to be determined and associated communication requirements
Rules for the appointment of an arbitration panel to consider the case
The procedure requiring the tax authorities to submit their proposed resolutions which address all unresolved issues in the case
The decision-making process for the arbitration panel and detail of how the decision will be implemented
The MOU has effect from the date of its signing on 16 June 2022.
The UK and Guernsey have signed a memorandum of understanding setting out how the arbitration process under article 25(5) of the UK/Guernsey Double Taxation Agreement (DTA) will be applied. This relates to the ‘mutual agreement’ part of the DTA, which covers situations where it is unclear which territory has the taxing rights. The principle enshrined in Article 25 is that the tax authorities of both jurisdictions will work together to mutually agree a solution.
Article 25(5) deals with arbitration, where it has not been possible for the tax authorities to reach agreement.
Alongside various administrative requirements, including for the provision of necessary information, the MOA sets out a number of key points:
Deadlines for both tax authorities to identify the issues to be determined and associated communication requirements
Rules for the appointment of an arbitration panel to consider the case
The procedure requiring the tax authorities to submit their proposed resolutions which address all unresolved issues in the case
The decision-making process for the arbitration panel and detail of how the decision will be implemented
The MOU has effect from the date of its signing on 16 June 2022.
