In order to avoid double taxation, in ‘parallel’ with the examination of a transfer pricing increase, a company asked SKAT to conduct a Mutual Agreement Procedure under article 6 of the EC Arbitration Convention. SKAT refused the request on the grounds that the case was not submitted to SKAT before the expiry of the three-year period provided for in article 6 of the EC Arbitration Convention. The company had appealed SKAT’s decision to the Tax Appeals Agency, but had at the same time - in accordance with SKAT’s guidance on legal action in the contested decision - taken the decision to the courts. The high court found that the EC Arbitration Convention is covered by the provision in Executive Order no. 1029 of 24 October 2005 concerning double taxation agreements. SKAT’s decision thus could not be appealed to another administrative authority, but instead had to be referred to the courts, which did take place. SKAT had refused the request to initiate the Mutual Agreement Procedure under the EC Arbitration Convention as not having been provided in a timely manner since the request did not include the necessary minimum information, see item 5 (a) (ii) of the Revised Code of Conduct for the EC Arbitration Convention. The high court found that a justification requirement can be derived from article 6(2) of the EC Arbitration Convention. Based on a specific assessment, the high court did not consider that the request could be deemed deficient with regard to the Code of Conduct’s requirements, and did not find that SKAT had sufficient grounds to refuse the request as not having been provided in a timely manner due to a lack of information. |