TMI BlogArticle 25 - Mutual Agreement ProcedureX X X X Extracts X X X X X X X X Extracts X X X X ..... of the Convention. [ Para 1 of Article 25 ] The competent authority shall endeavour, if the objection appears to it to be justified and if it is not itself able to arrive at a satisfactory solution, to resolve the case by mutual agreement with the competent authority of the other Contracting State, with a view to the avoidance of taxation which is not in accordance with the Convention. Any agreement reached shall be implemented notwithstanding any time limits in the domestic law of the Contracting States. [ Para 2 of Article 25 ] Competent authorities Resolve difficulties or doubts The competent authorities of the Contracting States shall endeavour to resolve by mutual agreement any difficulties or doubts arising as to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ess a person directly affected by the case does not accept the mutual agreement that implements the arbitration decision, that decision shall be binding on both Contracting States and shall be implemented notwithstanding any time limits in the domestic laws of these States. The competent authorities of the Contracting States shall by mutual agreement settle the mode of application of this paragraph. As per UN Model Tax Convention In the UN Model Tax convention Two alternative versions are given for Article 25 of the United Nations Model Tax Convention. Article 25 (Alternative A) Alternative A reproduces Article 25 of the OECD Model Tax Convention with the addition of a second sentence in paragraph 4 but excludes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Where, (a) under paragraph 1, a person has presented a case to the competent authority of a Contracting State on the basis that the actions of one or both of the Contracting States have resulted for that person in taxation not in accordance with the provisions of this Convention, and (b) the competent authorities are unable to reach an agreement to resolve that case pursuant to paragraph 2 within three years from the presentation of the case to the competent authority of the other Contracting State, any unresolved issues arising from the case shall be submitted to arbitration if either competent authority so requests. The person who has presented the case shall be notified of the request. These unresolved issues sha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt authorities of both Contracting States consider that such a case is not suitable for arbitration and neither of them makes a request). Third, paragraph 5, unlike the corresponding provision of the OECD Model Tax Convention, allows the competent authorities to depart from the arbitration decision if they agree to do so within six months after the decision has been communicated to them. Fourth, while the OECD Model Tax Convention provides that the two-year period begins when all the information required by the competent authorities in order to address the mutual agreement procedure case has been provided, paragraph 5 provides that the three-year period begins with the presentation of the mutual agreement procedure case to the com ..... X X X X Extracts X X X X X X X X Extracts X X X X
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