What Is the Future of the EU Arbitration Convention?

By: S.B. Huibregtse and R.H.M.J. Offermanns.

Since the EU Arbitration Convention (hereinafter: the Convention) was signed on 23 July 1990,4 an EU survey of various tax authorities published in 2001 (hereinafter: the Survey)5 regarding the use of the Convention seems to indicate that multinationals and tax authorities are avoiding the use of the Convention. Recent political pressure through, for example the EU Joint Transfer Pricing Forum (hereinafter: the Forum) has revived interest in the Convention as a practical tool to avoid double taxation. As a result, there are currently only three countries (Ireland, Italy and Portugal) that still need to ratify the extension of the Convention, to cause the Convention to apply retroactively from 1 January 2000.

This article will address the future of the Convention as a tool which – until today only in theory – could be used by both tax authorities and taxpayers in a time- and cost-efficient manner to avoid double taxation.

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