Arbitration Tax Procedure for the Settlement of Tax Treaty-Related Disputes: Critical Insights about a Diffused Resort to the Final Offer Arbitration Model with Respect to the Balance Between the Target of a Mandatory and Binding Decision on the Parties I

This essay critically examines the increasing use of the final offer arbitration (FOA) procedure in resolving tax treaty-related disputes in international and EU tax law. It explores the comparative experiences outlined by article 25(5) of the OECD Model, the OECD MLI (Part VI) and the EU Directive No. 1852/2017 (EU DRD), highlighting both advantages and challenges of the FOA model. The analysis focuses on whether an arbitration panel can be recognized as a referral body under article 267 of the TFEU, especially when questions of EU law interpretation arise, referencing the Achmea judgment by the Court of Justice of the European Union (CJEU). The essay also evaluates the CJEU’s potential interpretative role regarding the EU DRD when national courts of EU Member States submit preliminary rulings. Finally, it considers the position and participatory rights of taxpayers within the arbitration process, noting that the EU DRD, as EU secondary law, must uphold the principles and procedural guarantees enshrined in the European Charter of Fundamental Rights.