Tax Analysts provides news, analysis, and commentary on treaty-related topics, including competent authority matters. The term "competent authority" is used in income tax treaties to identify the representative in each of the jurisdictions who will be responsible for implementing the treaty and its provisions. The U.S. competent authority is the Deputy Commissioner (International) of the IRS Large Business & International Division. The U.S. competent authority derives his authority through delegation from the U.S. Treasury Secretary.
Most tax treaties permit taxpayers (both individuals and corporations) to request competent authority assistance when they believe that the actions of one or both of the treaty participants result in taxation contrary to the treaty’s provisions. The role of the competent authorities and the process they must follow for resolving treaty disputes are set out in a treaty’s Mutual Agreement Procedure (MAP) article. The MAP article provides general rules on how a taxpayer may request competent authority assistance and how the competent authorities should communicate with each other to resolve the dispute.
Most tax authorities have developed separate guidance that sets out the specific procedures for requesting competent authority assistance under a particular country’s tax treaties. In the U.S., the rules are contained in a revenue procedure issued by the IRS. The existing guidance is Rev. Proc. 2006-54, 2006-2 C.B. 1035, but the IRS is in the process of updating it (see Notice 2013-78, 2013-50 IRB 633, issued in November 2013.)
Tax Analysts has an extensive library of tax treaties from around the world as well as guidelines issued by tax authorities setting out the procedures for requesting competent authority assistance. Tax Analysts also provides news and analysis on the process for resolving treaty disputes through the competent authorities.
