The Australian Taxation Office has published a memorandum setting out procedures for resolving unresolved tax treaty disputes through arbitration under the OECD’s Multilateral Instrument, including final-offer and independent-opinion processes, timelines, confidentiality requirements, and eligibility exclusions.
The Australian Taxation Office (ATO) has published a Memorandum of Understanding signed with France outlining the mode of application for implementing Part VI (Arbitration) of the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (MLI).
The arrangement sets procedures for arbitration requests, minimum information, terms of reference, and the appointment of independent arbitrators, alongside strict confidentiality and impartiality requirements.
Final-offer arbitration is the default process, while the competent authorities may adopt an independent-opinion arbitration process. Strict timelines govern submissions and decisions, with arbitration decisions generally required within 90 days under final-offer arbitration or 365 days under independent-opinion arbitration, and decisions have no precedential value.
The competent authorities must implement decisions within 180 days. The CAA also establishes rules on costs, invalidation of decisions, and termination, while preserving ongoing arbitrations after termination. Australia excludes certain cases involving general anti-avoidance rules, while France reserves the right to exclude cases involving tax fraud penalties, taxable income below EUR 150,000, and certain EU arbitration procedures.
