Article 25 contains three distinct areas in which the mutual agreement procedure is generally applied. The process of mutual unification (POP) remains the most widely used way and the best way to eliminate double taxation. The effective use of PPIs by different instruments has been of interest to the OECD and the EU for more than 20 years. According to bePS, the number of double taxes is increasing and the number of POPs continues to increase. There is a growing emphasis on ensuring better dispute resolution techniques to more effectively eliminate double taxation. This article describes some of the features of the instruments currently available. Article 25 of the UN Model Convention on Double Taxation between Developed and Developing Countries1 (UN Model Convention) is a very important procedure for the implementation and implementation of bilateral treaties on the basis of the Model Convention. It provides for the establishment of a « mutual agreement procedure » (POP) allowing the contracting parties to better apply the physical provisions provided for them and which allocate the tax duties. The POP is managed by the « competent authorities, » which are generally referred to in Article 3, point e), treaties on the basis of the UN Model Convention.
It is very important to identify those designated as competent authorities. They usually come from the ministry or the tax administration (i.e.dem competent branch of the governments of the contracting states). These are the people normally responsible for administering the treaty and the Article 25 mutual agreement procedure establishes the agreed rules and principles to ensure that the treaty`s tasks are properly respected. The role of the competent authorities in Article 25 is to resolve « by mutual agreement » any difficulty or doubt as to the application of the treaty. It applies to all articles of the convention. The mutual unification process is a proven way of consulting with tax authorities to resolve disputes over the application of double taxation agreements. This procedure, described and approved in Article 25 of the OECD Model Convention, can be used to eliminate the double taxation that could result from an adjustment in transfer prices. In particular, Article 19 of the compulsory arbitration procedure must be mandatory if the competent authorities are unable to reach an agreement on the settlement of a case within two years of their start. This is a significant restriction on POPs cases in the past, as the competent authorities were only required to try to resolve cases and disputes could be resolved indefinitely.