A package deal is not a bad deal : reassessing the method of package negotiation under the mutual agreement procedure Qiang Cai
By: Cai, Qiang
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Material type: 
ArticlePublisher: 2018Subject(s): IMPUESTOS | CONVENIOS | TRATADOS INTERNACIONALES | CONFLICTOS JURISDICCIONALES | RESOLUCIONES EXTRAJUDICIALES DE CONFLICTOS | NEGOCIACION | PROGRAMAS
In:
Intertax v. 46, Issue 10, October 2018, p. 744-752Summary: Most of international tax disputes among jurisdictions have been resolved through the mechanism of the mutual agreement procedure (MAP). A long-standing concern with MAPs is that competent authorities might pursue a so-called package deal, whereby a certain taxpayer's interests would be sacrificed as part of a larger trade-off between the competent authorities. This article argues that, contrary to this common belief, a package deal under the MAP is not necessarily a bad deal; indeed, it even has the potential to strengthen the MAP mechanism. Specifically, this package deal method helps to reduce the average costs of handling MAP cases; expands the space for cooperation between competent authorities; and, if properly devised, helps to foster a stable fiscal climate. In a broader sense, the method of package negotiation also has implications for the mechanism of international tax mediation. This article adopts an interdisciplinary approach, combining the topic of the MAP with transaction cost theory.
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| OP 2141/2018/1 Intertax | OP 2141/2018/10 Intertax | OP 2141/2018/10-1 The OECD Financial Transactions Discussion Draft and BEPS Actions 8-10 | OP 2141/2018/10-2 A package deal is not a bad deal | OP 2141/2018/10-3 The new tie-breaker-rule for companies according BEPS Action Point 6 | OP 2141/2018/10-4 The dual system of OECD Model Tax Conventions from the evolutionary perspective | OP 2141/2018/1-1 McBEPS |
Resumen.
Most of international tax disputes among jurisdictions have been resolved through the mechanism of the mutual agreement procedure (MAP). A long-standing concern with MAPs is that competent authorities might pursue a so-called package deal, whereby a certain taxpayer's interests would be sacrificed as part of a larger trade-off between the competent authorities. This article argues that, contrary to this common belief, a package deal under the MAP is not necessarily a bad deal; indeed, it even has the potential to strengthen the MAP mechanism. Specifically, this package deal method helps to reduce the average costs of handling MAP cases; expands the space for cooperation between competent authorities; and, if properly devised, helps to foster a stable fiscal climate. In a broader sense, the method of package negotiation also has implications for the mechanism of international tax mediation. This article adopts an interdisciplinary approach, combining the topic of the MAP with transaction cost theory.
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