The double taxation agreement is available on the website of the Federal Ministry of Finance. In order to avoid double taxation due to possible measures taken by the tax administrator of another state in the context of the future controlled transaction, it is advisable to apply the request for harmonization of the principles of price-fixing of future controlled transactions and to conclude the agreement with the competent authority of another foreign state, in accordance with the provisions of the applicable tax treaty between the Republic of Lithuania and another State. , in order to avoid the taxation of income and capital. Once the application has been submitted, the procedure of mutual agreement can be initiated in accordance with the procedure provided for by the acts. Even in the event of an arbitration request, the EU review found that there could be many shortcomings in the system, including delays or lack of setting up the advisory committee and the lack of agreement on the appointment of the chairman of the advisory committee that delays or prevents the procedure. 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. Section 19 ensures that treaty disputes will be resolved within a specified time frame, making the MAP a more attractive option for taxpayers. In addition, sections 20 to 25 provide for the practical functioning of arbitration. In the past, it was often practical constraints or a lack of agreement on how to proceed that blocked the solution. 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. The Arbitration Convention of the European Union (EU) establishes a procedure for settling transfer pricing disputes for EU member states.