Directive 2017/1852 - Tax dispute resolution mechanisms in the EU


Summary of Legislation

Tax dispute resolution mechanisms


Directive (EU) 2017/1852 — EU tax dispute resolution system


It aims to improve the system for resolving disputes overtax agreements between EU countries, thus giving both citizens and businesses greater certainty and more timely decisions.

It concerns in particular disputes over double or multiple taxation — where 2 or more countries claim the right to tax the same income or profits.

It builds upon the 1990 convention on the elimination of double taxation which is limited to disputes over transfer pricing and the allocation of profits to permanent establishments (also known as the Union Arbitration Convention — UAC).



The directive applies to all taxpayers subject to taxes on income and capital covered by bilateral tax treaties and the UAC.

Settlement procedure

Mutual agreement procedure

As a first step, the claimant submits a complaint to the tax authorities of the EU countries concerned. The authorities should try to reach a mutual agreement on the complaint within 2 years after the complaint is accepted by the tax authority.

Dispute arbitration procedure

An Advisory Commission is set up to resolve a dispute when:

  • a complaint is rejected by one of the EU countries concerned:

An Advisory Commission can be requested by the claimant if one of the EU countries relating to the dispute rejects the complaint. The Advisory Commission must adopt a decision on the admissibility and acceptance of the complaint, within 6 months of the complaint's rejection, which is binding on the countries concerned.

  • a complaint is not resolved within 2 years after it is accepted:

An Advisory Commission must be set up if the tax authorities of the EU countries involved in the dispute failed to reach an agreement to eliminate the double taxation within 2 years after accepting the complaint. The Advisory Commission must deliver its opinion on how to solve the dispute no later than 6 months after being set up by the countries concerned.

The countries concerned may agree to set up an Alternative Dispute Resolution Commission instead of an Advisory Commission, which may differ in composition and form from the Advisory Commission. The countries in question have the right to take a decision that does not follow the opinion of the Advisory Commission or, if appropriate, the Alternative Dispute Resolution Commission. However, if they do not reach an agreement on how to settle the dispute, they are bound by this opinion.


The European Commission is to assess the application of the directive and report to the Council by 30 June 2024.


The directive has applied since 3 November 2017. It has to become law in the EU countries by 30 June 2019.


Cross-border double taxation arises when a business is taxed by 2 different countries on the same income or capital. It is a serious brake on doing business across borders, results in economic distortions and has a negative impact on cross-border investment.

For more information, see:


Council Directive (EU) 2017/1852 of 10 October 2017 on tax dispute resolution mechanisms in the European Union (OJ L 265, 14.10.2017, pp. 1-14)


Convention 90/436/EEC on the elimination of double taxation in connection with the adjustment of profits of associated enterprises — Final Act — Joint Declarations — Unilateral Declarations (OJ L 225, 20.8.1990, pp. 10-24)

Successive amendments to the Convention have been incorporated in the original text. This consolidated version is of documentary value only.

last update 06.02.2018

This summary has been adopted from EUR-Lex.


Legislative text

Council Directive (EU) 2017/1852 of 10 October 2017 on tax dispute resolution mechanisms in the European Union