I Double Taxation Dispute Resolution Mechanisms («DTDRMs») nella prospettiva evolutiva della direttiva UE 10 ottobre 2017, n. 1852. Dall’esperienza della Convenzione arbitrale 90/436/CEE allo sviluppo di una «MAP fiscale europea» mandatory arbitration oriented

The so-called «tax sovereignty principle» presents several questions and points of complexity related especially to such cases which are characterised by «elements of foreignness» respect to ones entirely regulated by domestic tax law. During the last decade, the tackling of international tax avoidance and evasion as well is acquiring an increasing dimension, above all taking into consideration the massive attention dedicated to these topics by the most well-known «cross-border institutions» like the OECD and the European Commission (hereinafter EU). The proper detection of effective «linkage criteria», which result difficult to undermine through practices as aggressive tax planning or the research of double non-taxation loopholes in the contacts between two or more «tax Treaties» referring to as many States interested by the businesses of Multinational enterprises (hereinafter MNEs), is the main feature where the legislation of each single Country drew its attention. Thus, the principal target that it has been kept in mind by scholars and the multinational institutions aforementioned is to prevent the taxpayer – whom global taxable base is composed by many components, positive or negative, deriving from foreign activities – to be able to gain a higher and unjustified reduction of his fiscal debt, due to the national Tax Authority, in respect to a comparable level of general wealth in charge of a taxpayer whom, other conditions being equal, obtains the same amount from businesses wholly managed by domestic issues. As a consequence, the taxation of those kinds of «foreign income flow» led to establish the «concept of residence», with a subjective pre-eminence, and the other one of the «source of wealth», as an objective criterion, like the essential two «linkage criteria» through which the apportioning of the right to impose and collect taxes can be allocated to different Jurisdictions, in the event of each of them unilaterally states to advocate to itself that right. And so, this situation can be put at the ground stage of emerging cases of so-called «double taxation» of the same flow of income, especially when the amount of levies and duties paid in the State of the source of income is not recognised at all or it is only partially admitted to deduction from the global taxable base of the percipient taxpayer in his residence State. As a matter of fact, the progressive integration and systematic connection between economies of developed and developing Countries, due to the globalisation of the network of producers and suppliers of goods and services, entails a necessity of instruments able to provide an effective, actual and timely resolution to disputes which could arise from these kinds of international economic relations. In particular, it has to be highlighted that a potential dispute involving parties’ resident in different Jurisdictions cannot be often effectively handled by domestic tax Courts, because of the «natural» limit, which encounters any kind of «jurisdictional function» and represented by the enforceability of the judgement only within the borders of such a State. In short, the taxpayer who assumes the taxation of his flow of income, or his different source of wealth, has taken place not in accordance with the provisions of a Convention settled between two or more States to avoid cases of double taxation, is entitled to make a claim to one of the States’ «Competent Authority » which stands for this unbalanced situation occurred and then a peculiar procedure has to be initiate to determine a solution to the matter explained. In this way, the «OECD Model Tax Convention on Income and on Capital » (hereinafter Model) prescribes a specific set of provisions contained in the art. 25 which founds the so-called «Mutual Agreement Procedure» (hereinafter, MAP). Nowadays, most of the Conventions in charge between two or more States focused on the contrast to double taxation issues, are drawn up based on the Model aforementioned and on the related Commentary. However, the procedure thereof does not put a binding obligation over the Competent Authorities involved, to such an extent they should endeavour to determine by mutual agreement the Contracting State of which a person shall be deemed to be a resident for the purposes of the Convention. The paragraph 5 of the art. 25 of the Model actually provides that «any unresolved issues arising from the case shall be submitted to arbitration if the person so requests in writing», even though its enforceability is subjected to the mutual and compliant will of the parties to insert these provisions into the Convention signed. It stands to reason that the evolutionary development of such mechanisms like the MAP is going to reach a «further stage», moving from a «non-binding» instrument to a mandatory one and, above all, to a «mandatory and binding arbitration» which is increasingly assessed as the best institution to effectively manage international tax disputes, through an alternative way in respect of the claim made under the domestic tax Courts. This example of alternative dispute resolution (hereinafter ADR) instrument can be considered as the «ultimate frontier» of Double Taxation Dispute Resolution Mechanisms (hereinafter DTDRMs), which is exactly consistent with the solutions defined by EU and, at the same time, with the issues underlined in the so-called BEPS Project – Base Erosion and Profit Shifting released by OECD and the G20, especially in the Action 14 – Making Dispute Resolution Mechanisms More Effective, where the implementation of such mechanisms is pointed out as an indispensable driver for ensuring the certainty and predictability of the legal consequences arising from cross-border transactions. Nevertheless, traditional instruments of international tax disputes resolution, as the MAP is, have demonstrated relevant critical aspects: first of all, lack of impartiality in the preliminary exam of the claim made by the taxpayer, as it is carried out by the same Competent Authority which has adopted the act in contrast to the provisions of the Convention; secondly, the absence of a binding procedure, fitted in with peremptory terms where any step of the proceeding thereof is clearly marked; lastly, the taxpayer is prevented to be heard by the Competent Authorities during the procedure, except he expressly so requests, and the effectiveness of the jurisdictional remedies ruled by domestic law. Notably, «the absence of a binding procedure fitted in with peremptory terms» has acquired and is still continuing to draw the attention of multinational organisations, to such an extent that a tax dispute resolution mechanism «mandatory arbitration oriented» has been contemplated by OECD releasing the Multilateral Convention to Implement Tax Treaty Related Measures to prevent Base Erosion and Profit Shifitng (hereinafter MLI) in 2017. There, Part VI of the MLI set forth a compulsory arbitration procedure to face any tax disputes related to double taxation in contrast to the provisions of a «covered Tax Agreement», even though the enforceability of this institution is once again subjected to the compliant will of the signing Countries. It is worth saying that the EU adopting the «Convention on the elimination of double taxation in connection with the adjustment of profits of associated enterprises – 90/436/EEC» (hereinafter European Arbitration Convention) has already done, although partially, this sort of «step forward» to a binding procedure suitable for fixing the double taxation issue complained by the claimant taxpayer. Actually, the particular MAP ruled by the artt. 6 and 7 of the European Arbitration Convention pushes the Competent Authorities involved to reach a solution to the condition of double taxation displayed, but at the same time it encounters a very significant limit, represented by the objective matter covered. In fact, the European Arbitration Convention provides this type of mechanism suitable just for those enterprises which maintain cross-border interactions with and participations in other ones settled in different EU Countries, and so they manage cases related to the broader area of the transfer pricing legislation. As a result of these statements the recent Directive EU 10th October 2017, No. 1852 is gaining a crucial importance in the framework described above. The experience provided apart by the MAP regulated by OECD Model and, on the other hand, the characteristics contained in the European Arbitration Convention’s procedure in accordance with the evolutionary pathway undertaken through BEPS Project and MLI, has stimulated the EU to carry out an improved «European Tax MAP» which fixed the majority of the weakness points and limits marked by the previous institutions. First of all, a «European Tax MAP» remarkably oriented to a mandatory arbitration mechanism which structure is forged on the basis of the so-called «Final Offer Arbitration – FOA» model, recapturing a comprehensive procedure equipped with those key features necessary to safeguard the taxpayer’s situation. Additionally, the provision of peremptory terms, the final decision devolved to a much more «impartial body» as it perceived at the sight of taxpayers, instead of the concentration of all the procedure in the hands of the Competent Authorities, and eventually the extension of the «areas covered» to all the cross-border tax matters, contributes to build up the attractiveness of the institution in the economic reality, in order to refine up the principle of reasonable predictability of the legal aftermaths of cross-border transactions.