Reflections on the ‘A’ Word

Reflections on the ‘A’ Word

Description

A BIT arbitration is much more elaborate, extensive, and costly than a MAP arbitration. A BIT arbitration of a tax issue is rarely heard by arbitrators who have more than passing knowledge of tax laws. ‘Fair and Equitable Treatment’, which is the core standard of BIT arbitration, is not a norm usually found in the tax laws and, insofar as a BIT is concerned, is not confined to tax disputes. It would therefore seem preferable to favour MAP arbitration over BIT arbitration as means of resolving tax disputes. While the MAP procedure is designed to address issues arising under a tax treaty, primarily issues of double international taxation, it might be possible to broaden the scope of MAP and MAP arbitration to encompass the sorts of tax issues that might come before an arbitral panel in a BIT arbitration. The ‘Fair and Equitable’ standard is probably not the right one for this purpose because it so vague and unenlightening, but something along the lines of ‘divergence from international standards’ might be appropriate and administrable. The benefits of channelling tax disputes away from BITs and into the tax treaties would be substantial. Gains in efficiency and cost would be enormous. The disputes would be considered by persons with substantial experience and expertise in tax matters. Resolution of disputes would be expedited. And yet nations could continue to maintain that investors have a measure of protection against arbitrary application of their tax laws.

First Page

63

DOI

https://doi.org/10.4337/9781035317042.00015

Source Publication

International Tax Disputes: Arbitration, Mediation, and Dispute Management

Source Editors/Authors

Hans Mooij

Publication Date

6-7-2024

Publisher

Edward Elgar Publishing

Reflections on the ‘A’ Word

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