United Nations Handbook on the Avoidance and Resolution of Tax Disputes

A main preoccupation of those responsible for designing tax systems is minimizing disputes concerning the interpretation and application of income tax laws and ensuring that any disputes are resolved fairly and effectively. Particularly for tax administrations of developing countries, fair and effective resolution of tax disputes serves to balance the dual country needs to raise domestic revenues and to attract and keep foreign investment. Achieving the right balance contributes to the strengthening of domestic resource mobilization. This publication provides guidance on the various mechanisms to avoid and if needed resolve tax disputes that may arise under the provisions of domestic income tax laws and tax treaties. The Handbook has two parts. Part 1 has a broad focus and deals with mechanisms for avoiding and resolving tax disputes that could arise in a purely domestic context as well as cross-border tax disputes, including those related to the application of tax treaties. Part 2 focuses exclusively on the Mutual Agreement Procedure included in tax treaties to resolve disputes or address doubts concerning the application or interpretation of the treaty provisions. The Handbook is a product of the UN Tax Committee and its Subcommittee on this issue, supported by the Secretariat in the UN Department of Economic and Social Affairs.