Documents considered by the Committee on 29 March 2017 Contents

2Taxation: double taxation dispute resolution

Committee’s assessment

Politically important

Committee’s decision

Not cleared from scrutiny; further information requested

Document details

Proposed Council Directive on double taxation dispute resolution mechanisms in the EU

Legal base

Article 115 TFEU, special legislative procedure, unanimity


HM Treasury

Document Number

(38214), 13732/16 + ADDs 1–3, COM(16) 686

Summary and Committee’s conclusions

2.1We have been holding a proposed Council Directive about resolving disputes between Member States on how double taxation should be eliminated in a business context since December 2016. The Government has told us now that although there has been progress in negotiating the proposal two issues remained outstanding. These are the exact scope of the double taxation to which the Directive should apply and the composition of the “Advisory Commission” which would settle disputes. Nevertheless, the Government has asked us to clear the document from scrutiny against the possibility that the Presidency might wish to achieve a political agreement at the May 2017 ECOFIN Council.

2.2While we note the progress that has been made on this proposal, we wish to have news of developments on the two outstanding issue before considering clearance from scrutiny. Meanwhile the document remains under scrutiny.

Full details of the documents

Proposed Council Directive on Double Taxation Dispute Resolution Mechanisms in the European Union: (38214), 13732/16 + ADDs 1–3, COM(16) 686.


2.3The Commission has proposed a Council Directive about resolving disputes between Member States on how double taxation should be eliminated in a business context. When, in December 2016 we considered this proposal, we asked the Government how it envisaged double taxation agreements working with the remaining Member States post-Brexit and whether it expected any difficulties to arise during negotiation of the proposed Council Directive. In February 2017 the Government told us that its bilateral agreement with each Member State would continue post-Brexit. It explained differences in these various bilateral agreements, in relation to dispute resolution, and of its expectation that the UK and the remaining Member States would eventually subscribe to an Organisation for Economic Cooperation and Development convention on such dispute resolution. As for difficulties arising during negotiation of the proposed Council Directive, the Government told us that there had been significant disagreement amongst Member States, including about whether a Council Directive was an appropriate method for improving resolution of double tax disputes and that the Maltese Presidency’s hope for a political agreement at the May 2017 ECOFIN Council meeting currently seemed unlikely to be met.

The Minister’s letter of 27 March 2017

2.4The Financial Secretary to the Treasury (Jane Ellison) has now updated us about progress on this proposed Council Directive. She told us that four Council working parties had now been held, with compromise proposals produced and discussed on the first fifteen articles, so that this seemed an opportune time to provide us with a progress report. The Minister said that a number of outstanding issues remained under discussion, including:

2.5The Minister continued that:

Previous Committee Reports

Thirty-second Report HC 71-xxx (2016–17), chapter 5 (22 February 2017) and Twenty-second Report HC 71-xx (2016–17), chapter 7 (7 December 2016).

31 March 2017