Mutual agreement procedures between countries to avoid double taxation

It was issued in 2008, but with a last amendment in November 2015, the Rules for Mutual Agreement Procedures in the field of direct taxation have been in force. This concept of Mutual Agreement Procedures (MAP, Mutual Agreement Procedure) may sound familiar to us if we are familiar with double taxation agreements as there is usually an article in them that talks about them and establishes certain rules and deadlines to be followed (the agreements that follow the OECD model).


Mutual agreement procedure mechanism characteristics


This mutual agreement procedure mechanism, as it is provided in the double taxation conventions (there are other mutual agreement procedures regulated by the European Arbitration Convention, which, although they have some common aspects with which we are referring, are somewhat different), has some noteworthy characteristics:

  • It is not at all incompatible with the economic-administrative route. In other words, the taxpayer can go to court and at the same time request a friendly procedure (which will often be resolved “de facto”)

  • It is possible that the procedure will end without resolution. No judge or court is obliged to give a favourable ruling in whole or in part to one of the parties.

  • The taxpayer has to apply for this in the country where he is resident under the agreement, whether the proceedings are to be initiated by the administration of the state where he is resident or by the administration of the other state to which the case relates. In Spain, it will be presented to the Tax Office or the Directorate General of Taxes depending on the case.

  • There is no specified time limit to resolve.

Reasons for a mutual agreement refuse


If the mutual agreement procedure is applied in Spain, the taxpayer, who must provide all the necessary documentation duly required by the administration, must take into account that he may be refused to initiate the mutual agreement procedure for various reasons. Submitting the request is not always synonymous with the fact that the case will be reviewed (e.g. because of problems with deadlines, lack of documentation, not being a problem with the agreement, etc.):

  1. Voluntary withdrawal by the taxpayer

  2. Termination by agreement not to eliminate double taxation or non-conforming taxation.

  3. Termination by agreement to eliminate double taxation or inconsistent taxation.

These mutual agreement procedures can help in certain cases and given their compatibility with the judicial system, it may be interesting to request one (normally it is a period of three years from the occurrence of the event that gives rise to the double taxation dispute).


If you have doubts about your case and need an opinion on the convenience of presenting a mutual agreement procedure, or if you have already decided on it and want to go ahead with the application, do not hesitate to contact us. Our International Department will be glad to help you.




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