Tax Controversy and Dispute Resolution: Tax Memo

Download

Memorandum of Understanding (MOU) on the Canada-US Tax Treaty Arbitration Process

The competent authorities of Canada and the United States have released an important Memorandum of Understanding (MOU) regarding the conduct of mandatory binding arbitration proceedings under the mutual agreement procedure (MAP) of the Canada-U.S. Tax Treaty.

In addition to establishing the procedures for handling arbitration cases, the MOU signals that the two countries have resolved their differences regarding:

• the scope of the treaty's arbitration provision
• the types of cases eligible for arbitration
• the manner in which issues will be resolved in arbitration proceedings

The governments released the MOU just before the December 15, 2010 date on which MAP cases can become eligible for arbitration. Read this Tax Memo to get the background and our Tax Controversy and Dispute Resolution group’s observations.