TAXPAYER’S RIGHT OF EFFECTIVE PARTICIPATION IN THE PROCEDURE. A COMPARED ANALYSIS AMONG OECD MUTUAL AGREEMENT PROCEDURE (MAP), EUROPEAN ARBITRATION CONVENTION (EAC) AND EU DIRECTIVE NO. 1852/2017 ON ALTERNATIVE DISPUTE RESOLUTION MECHANISMS (EU DRD)

This essay is aimed at investigating by which means and to what an extent should be guaranteed the taxpayer’s right of effective participation to those procedures managed by different Jurisdiction’s Tax Authorities in the context of Double Tax Conventions (DTCs) provisions’ application among contracting States, in order to settle double taxation arising from cross-border transactions. In this vein, it will be adopted a comparative approach between the so-called «MAP model» enshrined in the Art 25, OECD Model Tax Convention on Income and on Capital (OECD Model) and the other equivalent procedures set forth in the EU legal framework, namely both in the EAC and in the EU DRD. This is meant to put in the spotlight the necessary thoughtful balance between Tax Authorities’ right to properly and actually enforce those DTCs provisions aimed at countering international tax avoidance or evasion phenomena, on one hand, and the adequate and proportional recognition of effective participation rights in favour of the taxpayer involved in such procedures, making the procedure thereof fully transparent and accessible for him, on the other hand. Whilst the taxpayer is effectively and promptly enabled to participate and, above all, to provide Tax Authorities with evidence, documents and even pleadings to illustrate the legitimacy of his behaviour, it would allow him to gain a satisfactory comprehension of the reasons behind the decision made by Tax Authorities, regarding the double taxation issue at stake. Eventually, it leads to levy a tax – or to impose an additional tax liability – in charge of the taxpayer involved, which is expectedly in compliance with the effective ability-to-pay shown off by the transaction or the series of transactions considerated. In detail, by particular reference to the EU law area, the taxpayer’s position in the EU DRD should be evaluated in the light of an appropriate safeguard of the general principles laid down by the EU Charter of Fundamental Rights. Moreover, in order to preserve the taxpayer’s «right of defence», the recent adoption the EU Directive 2021/514/EU (DAC 7) provides several foods for thought to hasten a specific intervention by the EU legislature, in order to regulate and harmonise – at the EU law level – the taxpayer’s right of effective participation in tax assessment and (joint) audit procedures activated simultaneously in different EU Member States.