The application of the DRM Directive to the Directive on dispute settlement mechanisms is still limited, according to the European Commission’s report published on Tuesday 29 October (see EUROPE 13371/43). However, all Member States have fully implemented the DRM Directive.
“The DRM Directive seems to meet the objectives that were set at the time of the adoption”, the Commission reported. The DRM Directive provides for a “comprehensive, effective and sustainable” dispute resolution mechanism. “The enhanced position of the taxpayer(s) to have the double taxation resolved in a binding manner contributes to a fairer tax environment”, it commented.
However, the first cases of double taxation falling within the scope of the ‘DRM’ Directive are only now appearing, due to the closure of tax audits covering tax years starting from 2018. It was therefore only possible to provide limited, if any, feedback. No advisory committee had yet been set up.
Suggestions have already been made to improve certain aspects of the directive in terms of clarity on the interpretation and application of certain rules or definitions, in order to ensure a common approach. It was also suggested that the scope of the DRM Directive should be extended and that the resolution mechanism should be used to resolve disputes relating to other directives in the field of direct and indirect taxation.
Once more experience has been gained, the Commission will be able to carry out a full evaluation and, if necessary, present proposals to improve DRM.
To read the report: https://aeur.eu/f/e30 (Original version in French by Anne Damiani)