Abstract:
This paper explores the addition of arbitration into the Mutual Agreement Procedure of the OECD’s Model Double Tax Convention. Through a critical analysis of the provisions it determines that the arbitration clause does not uphold the core tenets of arbitration. The provisions is more akin to fact finding or an advisory opinion. It is suggested that this is an unsatisfactory state of affairs. The purpose of implementing the arbitration provision was to provide for effective and efficient dispute settlement—the result however, is vastly different. The provision is not completely condemned however. This paper suggests a number of improvements to the provision including binding arbitration, a waiver to further remedies and publication of arbitral awards. It is suggested that these improvements will facilitate effective and efficient dispute settlement and progress the OECD’s nascent proposal into a cornerstone of international tax disputes.
