Jurisdiction of the BZSt for Mutual Agreement, Arbitration and APAs Procedures In addition to these developments, the European Union has proposed a new directive on dual taxation dispute settlement mechanisms in the European Union, which aims to resolve cases of double taxation within the EU by mutual agreement between member states. This could become, when the time comes, another instrument that EU taxpayers will be able to access when the time comes.  The mutual agreement reached becomes binding only if the subject approves it in writing, waives the right of appeal and withdraws all pending appeals. For companies, the legal basis for mutual agreement procedures can also be the EU Arbitration Convention. For more information, please see the section on business-to-business agreement procedures. BMF letter of October 9, 2018, leaflet on reciprocal international agreements and income and wealth tax arbitrations. This notice replaces the notice of July 13, 2006 – IV B 6-S 1300-340/06 -, BStBl I 2006, p. 461. The provisions of the letter of BMF of 5 April 2017 – IV B 5 – S 1304/0-04 – BBl I 2017, 707 are contained in paragraph 5 of the notice of 9 October 2018.
Changes to the previous brochure include paragraph 1.1.3 (the scope of the EU Arbitration Agreement), paragraph 1.4 (coordinated by the competent authority) and paragraph 2.2.2 (information on the deadlines for filing applications in double taxation conventions). As a result, multinational companies facing cross-border litigation are well advised to proactively consider the use of POPs (as well as other alternative dispute resolution mechanisms, such as bilateral advance price agreements – ASA) when available, while pursuing their options along the usual national channels. The OECD publishes, by mutual agreement, statistics on the procedures of OECD member countries under the framework of `POP statistics`. In many countries, MAP is also used as a basis for the adoption of bilateral pre-price agreements (APAs). In this approach, taxpayers are taking proactive steps to obtain two countries` agreement on the transfer pricing regime they apply to their cross-border transactions. In this context, a POP is used as an instrument to avoid transfer pricing disputes. Upon receipt of the application, the BZSt verifies whether the conditions for the implementation of a mutual agreement procedure are met. The transnational part of a mutual agreement procedure is only implemented if the request is admissible and duly reasoned and if a satisfactory solution is not possible in Germany. Where measures taken by one or more countries lead to non-DBA taxation (particularly in the area of double taxation), the taxpayer concerned may request a procedure of mutual agreement.
In Germany, the Bundeszentralamt for Steuern (BZSt) is responsible for the implementation of these procedures. If all the conditions are met, the countries concerned try to resolve the tax dispute by mutual agreement. This will generally avoid double taxation. Subjects who believe that their imposition is contrary to a DBA or the European Arbitration Convention may request a procedure of mutual agreement. In Germany, the Bundeszentralamt for Steuern (BZSt) is responsible for the implementation of these procedures. Applications for mutual agreement proceedings can therefore be filed directly with the BZSt. As a general rule, non-German resident applicants must submit these applications to the competent authority of their country of residence. «Common audits» are coordinated bilateral and multilateral tax controls that can be carried out within the framework of mutual assistance, at the same time as the exchange of information on … As a general rule, the application must be submitted within a time frame set by the DBA.