Resolution Of Tax Treaty Conflicts By Arbitration

In a world of tight legal and economic networks, international tax treaty conflicts arising from the application and interpretation of double tax treaty are on the increase. The international tax treaty conflicts may arouse double taxation and hinder free development of international economy.Until recently, the mutual agreement procedure has virtually been the most important means of settling international tax treaty conflicts. However, if the competent authorities hold different views, the conflicts cannot be settled by the mutual agreement procedure. And, although there is a possible that the competent authorities may reach an agreement, the procedure is extremely time-consuming. To settle the problem, some scholars and IGOs propose: resolution of international tax treaty conflicts by arbitration.The discussion of arbitration as a method of solving international tax treaty conflicts is based on the assumption that the proceeding the mutual agreement procedure has not been successful. Arbitration is equitably, predictable and transparent. It always applies law rather than expediency, and provides participation rights with taxpayer impartially, and can reach a conclusion. International arbitration can settle international tax treaty conflicts arising from the application and interpretation of double tax treaty and eliminate many of double taxation equitably and rationally.The article is divided into five parts.Part I is "Introduction" . This part reviews the historical development of different methods of international tax disputes resolution. Moreover, the part defines international tax treaty conflict arbitration.Part II is "Resolution of tax treaty conflicts by traditional methods" . This part introduces definition, kinds and features of international tax treaty conflicts firstly.Then the part reviews principles and traditional methods of tax treaty conflicts resolution.Part III is "Resolution of tax treaty conflicts by arbitration" . The part introduces the reason of rise of tax treaty conflicts arbitration, then the part introduces the content and function of arbitration.Part IV is "The development of international tax treaty conflict arbitration" . The part introduces the weakness of the international tax treaty conflict arbitration. Then, I make some suggestions for perfecting the arbitration.Part V is "The concluding remarks" . The mutual agreement procedure and international tax arbitration frame the disputes settlement mechanism of international tax treaty conflicts. If preceding the mutual agreement procedure has not been successful, contracting states must initiate international tax arbitration immediately.