The international cooperation between tax authorities is growing and the legal instruments for such cooperation are expanding. The use of the appropriate legal basis should get sufficient attention, particularly in the administrative tax cooperation between EU Member States. The primacy of EU law and its direct application must be respected. This is also important for the legal protection of the taxpayers.
This article focuses on the impact of EU law on the competence of EU Member States to include provisions in double taxation treaties among themselves that concern some aspects for which EU legislation has already been adopted: provisions on a mutual agreement procedure, on exchange of information and on recovery assistance.
It is concluded that in the current EU context, provisions on these forms of administrative tax cooperation should no longer feature in double taxation treaties between EU Member States. Only where the applicable EU legal instruments leave room for a wider administrative cooperation, Member States can still include such provisions in their double taxation treaties. The latter condition calls for a strict interpretation, given the primacy of EU law.
EC Tax Review