Canada and France have signed a Competent Authority Arrangement establishing procedural rules for applying the arbitration provisions under Part VI of the OECD Multilateral Convention to the Canada–France Income and Capital Tax Treaty (1975), covering submission requirements, confidentiality standards, arbitrator impartiality, and timelines for implementing final decisions.
According to a recent update from the Canadian government, Canada and France have signed a Competent Authority Arrangement establishing the procedures for applying the arbitration provisions under Part VI (Arbitration) of the OECD Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (MLI).
The arrangement applies to arbitration under Article 25 of the Canada–France Income and Capital Tax Treaty (1975), as amended by the 1987, 1995, and 2010 protocols and modified by paragraph 10 of Article 19 (Mandatory Binding Arbitration) of the MLI. It outlines the specific procedural rules and requirements for submitting cases when tax authorities cannot reach a mutual consensus on issues like double taxation.
The arrangement also emphasises strict confidentiality standards and impartiality for appointed arbitrators to ensure a fair resolution for all affected taxpayers. Additionally, it specifies the legal scope of the arrangement, noting certain exclusions and the required timelines for implementing final decisions.
Under Article 36 of the Convention, the arbitration provisions of Part VI apply to cases presented to a competent authority on or after the later of the dates on which the Convention entered into force for each of the Contracting Jurisdictions.
For mutual agreement procedure (MAP) cases presented before this date, Part VI will only apply if both competent authorities mutually agree to include that specific case. If such an agreement is reached, the competent authorities must notify the person who presented the case within 14 days, providing them with the details of the agreement and the start date of the three-year period.
