Study On Status Of Taxpayers In The International Tax Arbitration

As international tax allocation relationship involves interest distribution relationship among tripartite main body, including multinational taxpayer’s country of residence, transnational income source country and multinational taxpayers. Solving international tax controversies generated by such tax relations should not only safeguard national tax sovereignty and tax benefits, but also protect legitimate rights and interests of the multinational taxpayers.In the relatively recent international tax arbitration, tax arbitration rules give taxpayer different legal status, published by early bilateral tax agreement, the EC Arbitration Convention and ICC, IFA, OECD in recent years. However, the provisions of the arbitration clauses cannot achieve desired objectives and substantially improve protection of the legitimate rights and interests of multinational taxpayers. On the one hand, in the bilateral tax treaties and the EC Arbitration Convention, the provisions of taxpayer status only give limited right to taxpayers, and do not confer substantive right of participation on taxpayer, and limited rights of taxpayers also cannot get a very good implementation. On the other hand, in arbitration rules published by international organizations, certain provisions give too many rights to the taxpayers. To some extent, it affects national control power of the arbitration proceedings, and goes beyond the acceptable range of countries, and is not conducive to national acceptance in the bilateral tax treaty. Therefore, the current status of the multinational taxpayers in international tax arbitration is flawed. It will not only ruin legitimate rights and interests of the taxpayer, to some extent, but also limit national tax sovereignty.In theory, the existing international tax arbitration introduces the third party system, and establishes taxpayer third party status, and reasonably limits scope of the taxpayers’rights. It can guarantee the taxpayers to defend their legitimate rights through arbitration, but not gives too much damage and negative impact to the tax sovereignty of States Parties. In addition, it is possible in the international tax environment. Finally, it is recommended that arbitration clauses should be introduced to our bilateral tax treaties. It will compensate for defects in the single tax treaty dispute resolution mechanism in china, and solve our foreign tax disputes more equitably and effectively, and protect the economic interests of our national multinational investors better. In addition, taxpayer third party status should be established in the arbitration clauses.