EUROPEAN UNION TAX DISPUTE RESOLUTION MECHANISMS DIRECTIVE IMPLEMENTATION REGULATIONS

MECHANISMS DIRECTIVE IMPLEMENTATION

SUBSIDIARY LEGISLATION 123.191

EUROPEAN UNION TAX DISPUTE RESOLUTION

MECHANISMS DIRECTIVE IMPLEMENTATION

REGULATIONS

1st July, 2019

LEGAL NOTICE 159 of 2019, as amended by Legal Notice 441 of 2020.

(1)

The title of these regulations is the European

Union Tax Dispute Resolution Mechanisms Directive Implementation

Regulations.

(2)

These regulations shall come into force on the 1 July

2019. They shall apply to any complaint submitted on or after 1 July

2019 relating to questions in dispute relating to income or capital

earned in or after the year immediately preceding the year of

assessment 2019.

(1)

The scope of these regulations is the

implementation of Council Directive (EU) 2017/1852 of 10 October

2017 on tax dispute resolution mechanisms in the European Union.

(2)

These regulations lay down rules on a mechanism to

resolve disputes between Malta and other Member States when those

disputes arise from the interpretation and application of agreements

and conventions that provide for the elimination of double taxation of

income and, where applicable, capital. It also lays down the rights and

obligations of the affected persons when such disputes arise.

(1)

In these regulations, unless the context requires

otherwise

"affected person" means any person, including an

individual, that is a resident of a Member State for tax purposes,

and whose taxation is directly affected by a question in dispute;

"Commission" means the Commission of the European

Union;

"Commissioner" means that it also includes his

authorised representative;

"competent authority" in respect of Malta means the

Commissioner and in respect of any other Member State it

means the authority of that Member State which has been

designated as such by that Member State concerned;

"competent court" in respect of Malta means the Civil

Court, First Hall and in respect of any other Member State it

means the court, tribunal or other body of a Member State

which has been designated as such by that Member State

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concerned;

"double taxation" means the imposition by two or more

Member States of taxes covered by an agreement or convention

referred to in regulation 2(2) in respect of the same taxable

income or capital when it gives rise to either

(a)

the imposition of an additional tax charge;

(b)

an increase in tax liabilities; or

(c)

the cancellation or reduction of losses that

could be used to offset taxable profits;

"Member State" means a member of the European

Union;

"Member State concerned" means a Member State

involved in the question in dispute;

"other Member State" means a Member State other than

Malta;

"question in dispute" means the matter giving rise to a

dispute referred to in regulation 2(2).

(2)

Any term not defined in these regulations shall, unless

the context requires otherwise, have the meaning that it has at that time

under the relevant agreement or convention referred to in regulation

2(2) that applies on the date of receipt of the first notification of the

action that resulted in, or that will result in, a question in dispute. In

the absence of a definition under such agreement or convention, an

undefined term shall have the meaning that it had at that time under the

law of the Member State concerned for the purposes of the taxes to

which the said agreement or convention applies, any meaning under

the applicable tax laws of that Member State prevailing over a

meaning given to the term under other laws of that Member State.

(1)

An affected person shall be entitled to submit a

complaint to the Commissioner on a question in dispute requesting the

resolution thereof.

(2)

An affected person shall have the right to submit a

complaint to the Commissioner in accordance with these regulations

regardless of whether he has recourse to remedies available under any

other provisions of Maltese law or the law of any one (1) of the other

Member States concerned.

(3)

A complaint shall be submitted to the Commissioner in

the Maltese or the English language within three (3) years from the

receipt by the affected person of the first notification of the action

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resulting in, or that will result in, the question in dispute.

(4)

The affected person shall indicate in the complaint made

to the Commissioner which other Member States are concerned and

shall simultaneously submit the complaint with the same information

to the competent authority of each of the other Member States

concerned.

(1)

A complaint shall only be accepted by the

Commissioner if, as a first step, the affected person making the

complaint provides the Commissioner and the competent authorities of

each of the other Member States concerned with the following

information

(a)

the name(s), address(es), tax identification

number(s) and any other information necessary for

identification of the affected person(s) who presented the

complaint to the competent authorities and of any other person

concerned;

(b)

the tax periods concerned;

(c)

details of the relevant facts and circumstances of

the case (including details of structure of the transaction and of

the relationship between the affected person and the other

parties to the relevant transactions, as well as any facts

determined in good faith in a mutual binding agreement

between the affected person and the tax administration, where

applicable) and more specifically, the nature and the date of the

actions giving rise to the question in dispute (including, where

applicable, details of same income received in the other

Member State and of inclusion of such income in the taxable

income in the other Member State, and details of the tax

charged or that will be charged in relation to such income in the

other Member State), as well as the related amounts in the

currencies of the Member States concerned, with a copy of any

supporting documents;

(d)

reference to the applicable national rules and to

the agreement or convention referred to in regulation 2(2);

where more than one (1) agreement or convention is applicable,

the affected person making the complaint shall specify which

agreement or convention is being interpreted in relation to the

relevant question in dispute. Such agreement or convention

shall be the applicable agreement or convention for the

purposes of these regulations;

(e)

the following information, together with copies of

any supporting documents

(i)

an explanation of why the affected person

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considers that there is a question in dispute;

(ii)

the details of any appeals and litigation

initiated by the affected person regarding the relevant

transactions and of any court decisions concerning the

question in dispute;

(iii) a commitment by the affected person to

respond as completely and quickly as possible to all

appropriate requests made by a competent authority and

to provide any documentation at the request of the

competent authorities;

(iv) a copy of the final tax assessment decision

in the form of a final tax assessment notice, tax audit

report or other equivalent document leading to the

question in dispute and a copy of any other documents

issued by the tax authorities with regard to the question

in dispute where relevant;

(v)

information on any complaint submitted by

the affected person under another mutual agreement

procedure or under another dispute resolution procedure

as defined in regulation 21(5) and an express

commitment by the affected person that he will abide by

the provisions of regulation 21(5), if applicable;

(f)

any specific additional information requested by

the competent authorities that is considered necessary to

undertake the substantive consideration of the particular case.

(2)

The Commissioner may request additional information

referred to in paragraph (f) of sub-regulation (1) within three (3)

months from the receipt of the complaint. The Commissioner may

make further requests for information during the mutual agreement

procedure under regulation 10 when he considers this to be necessary,

without prejudice to the applicability of the laws of Malta and of the

national laws of the other Member States concerned regarding the

protection of information and the protection of trade, business,

industrial or professional secret or trade processes.

(3)

The affected person shall reply to any request made to

him by the Commissioner in accordance with paragraph (f) of sub-

regulation (1) within three (3) months from the receipt of the request

and shall send a copy of the reply simultaneously to the competent

authorities of the other Member States concerned.

The Commissioner shall acknowledge receipt of the

complaint within two (2) months from the date on which he receives

it. He shall also within that period inform the competent authorities of

the other Member States concerned of the receipt of the complaint and

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about the language or languages he intends to use for communications

during the relevant proceedings.

(1)

The Commissioner shall take a decision on the

acceptance or rejection of the complaint within six (6) months of the

receipt thereof or within six (6) months of the receipt of the

information referred to in regulation 5(1)(f), whichever is later. The

Commissioner shall inform the affected person and the competent

authorities of the other Member States concerned of his decision

without delay.

(2)

The Commissioner may decide to reject a complaint

within the period provided for in sub-regulation (1) if

(a)

the complaint lacks information required under

regulation 5, (including any information requested under

regulation 5(1)(f) that was not submitted within the deadline

specified in regulation 5(3));

(b)

there is no question in dispute; or

(c)

the complaint was not submitted within the three

(3) year period set out in regulation 4(3).

(3)

When informing the affected person of a decision to

reject a complaint in accordance with the provisions of sub-regulation

(1), the Commissioner shall provide the general reasons for the

rejection.

(4)

Where the competent authorities of all the Member

States concerned have rejected the complaint, the affected person shall

have the same right to appeal from the decision of the Commissioner

rejecting the complaint as if the Commissioner’s decision were an

assessment issued under the Income Tax Management Act and as if the

Commissioner has refused an objection to an assessment duly filed by

the affected person, and the relevant provisions of the Income Tax

Management Act relating to appeals shall apply mutatis mutandis

Provided that the time within which an appeal may be

made in accordance with article 35(1) of the Income Tax Management

Act shall run from the date on which the affected person has been

notified of the decision to reject the complaint by the competent

authorities of all the Member States concerned.

(5)

An affected person who exercises the appeal right

referred to in sub-regulation (4) or an appeal right under the national

law of any other Member State concerned shall be barred from making

a request under regulation 11(1)(a)

(a)

while the decision is still under appeal according

to the provisions of the national law of any of the Member

States concerned;

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(b)

where the rejection decision can still be further

appealed under the appeal procedure of any of the Member

States concerned; or

(c)

when a rejection decision has been confirmed

under the appeal procedure in sub-paragraph (5)(a) but it is not

possible to derogate from the decision of the relevant court or

other judicial bodies in any one (1) of the Member States

concerned.

(6)

Where an appeal right referred to in sub-regulation (4)

has been exercised, the decision of the relevant court or other judicial

body shall be considered for the purposes of regulation 11(1)(a).

(7)

Where the Commissioner has not taken a decision on the

complaint within the time provided for in sub-regulation (1), the

complaint shall be deemed to be accepted by the Commissioner.

(1)

Within the period of six (6) months from the

receipt of a complaint, or within six (6) months of the receipt of the

information referred to in regulation 5(1)(f), whichever is later, the

Commissioner may decide to resolve the question in dispute on a

unilateral basis, without involving the competent authorities of the

other Member States concerned. In such case, he shall notify the

affected person and the competent authorities of the other Member

States concerned without delay.

(2)

Following a resolution of the question in dispute by the

Commissioner or by the competent authority of any of the other

Member States concerned, the proceedings under these regulations

shall be terminated.

(1)

An affected person that wishes to withdraw a

complaint shall simultaneously submit a written notification of

withdrawal to the competent authorities of each one (1) of the Member

States concerned. Such notification shall terminate all proceedings

under these regulations with immediate effect.

(2)

When the Commissioner receives such a notification he

shall inform the competent authorities of the other Member States

concerned of the termination of proceedings without delay.

(3)

If for any reason a question in dispute ceases to exist, all

proceedings under these regulations shall terminate with immediate

effect and the Commissioner shall inform the affected person of this

state of affairs and of the general reasons therefore without delay.

(1)

(a) Where the Commissioner and the competent

authorities of the other Member States concerned accept a complaint,

the Commissioner shall seek to resolve the question in dispute by

mutual agreement with the competent authorities of the other Member

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States concerned within two (2) years starting from the last

notification of a decision of the competent authority of one (1) of the

Member States on the acceptance of the complaint.

(b)

The said period of two (2) years may be

extended by up to one (1) year at the request of the competent

authority of another Member State concerned to the

Commissioner

Provided that such request is received by the

competent authorities of all the Member States concerned, and

the requesting competent authority provides written

justification;

(c)

The Commissioner may request an

extension referred to in paragraph (b) where he considers that

the circumstances of the case make such an extension

necessary. In making such a request, the Commissioner shall

send a written request with appropriate justification to all the

competent authorities of the other Member States concerned.

(2)

Once the Commissioner has reached an agreement with

the competent authorities of the other Member States concerned as to

how to resolve the question in dispute within the period provided for in

sub-regulation (1), he shall, without delay, notify this agreement to the

affected person, as a decision that is binding on the Commissioner and

enforceable by the affected person, subject to the affected person

accepting the decision and renouncing the right to any other remedy,

where applicable

Provided that where proceedings regarding such other

remedies have already commenced, the decision shall only become

binding and enforceable once the affected person has provided

evidence to the Commissioner and to the competent authorities of the

other Member States concerned that action has been taken to terminate

those proceedings. Such evidence shall be provided not later than sixty

(60) days from the date on which such decision was notified to the

affected person. The Commissioner shall then implement the decision

without delay, irrespective of any time limits prescribed by Maltese

law.

(3)

Where the competent authorities of the Member States

concerned have not reached an agreement on how to resolve the

question in dispute within the period provided for in sub-regulation

(1), the Commissioner shall inform the affected person indicating the

general reasons for the failure to reach an agreement.

(1)

Upon a request made by the affected person, the

Commissioner shall take the necessary action for the setting up of an

Advisory Commission in accordance with regulation 13 where

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(a)

the complaint submitted by such affected person

was rejected by the Commissioner under regulation 7(2) or,

where the Commissioner has not rejected the complaint, the

complaint was rejected by the competent authority of at least

one (1) of the other Member States concerned under provisions

of the national law of that Member State corresponding to

regulation 7(2); or

(b)

the Commissioner and the competent authorities

of the other Member States concerned had accepted the

complaint that was submitted by the affected person but failed

to reach an agreement on how to resolve the question in dispute

by mutual agreement within the time limit provided for in

regulation 10(1).

The functions and obligations of an Advisory Commission and

its members as provided for in these regulations shall be deemed to

form part of its terms of reference.

(2)

The affected person may only make a request under

paragraph (a) of sub-regulation (1) if, in accordance with the laws of

Malta or any applicable national rules of the Member State whose

competent authority rejected the complaint in accordance with

provisions in the national law of that Member State that correspond to

regulation 7(2)

(a)

no appeal can be made;

(b)

no appeal is pending; or

(c)

the affected person has formally renounced his

right of appeal.

The request shall include a declaration to this effect.

(3)

The affected person shall make the request to the

Commissioner to set up an Advisory Commission in writing, not later

than fifty (50) days from the date of receipt of the notification under

regulation 7(1) or 10(3) or fifty (50) days from the date of delivery of

the decision by the relevant court or judicial body under regulation

7(4), as the case may be.

(4)

The Commissioner shall take the necessary steps for the

setting up of the Advisory Commission by not later than one hundred

and twenty (120) days from the receipt of the request referred to in the

foregoing sub-regulations, and once the Advisory Commission is set

up, its Chairperson shall inform the affected person thereof without

delay.

(5)

The Advisory Commission set up in the case of sub-

regulation (1)(a) shall adopt a decision on the acceptance of the

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complaint within six (6) months from the date of its establishment. It

shall notify the competent authorities of its decision within thirty (30)

days of the adoption thereof.

(6)

(a)

Where the Advisory Commission set up in the

case of sub-regulation (1)(a) has confirmed that all of the requirements

under regulations 4 and 5 have been satisfied, the mutual agreement

procedure provided for in regulation 10 shall be initiated at the request

of the Commissioner or of the competent authority of any one (1) of

the other Member States concerned. Where the request is made by the

Commissioner, he shall notify the Advisory Commission, the

competent authorities of the other Member States concerned and the

affected person thereof. The period provided for in regulation 10(1)

shall start from the date of the notification of the decision taken by the

Advisory Commission of the acceptance of the complaint.

(b)

Where none of the competent authorities of the

Member States concerned has requested the initiation of the

mutual agreement procedure as per paragraph (a) within sixty

(60) days of the date of the notification of the decision of the

Advisory Commission, the Advisory Commission shall provide

an opinion on how to resolve the question in dispute as provided

for in regulation 19(1). In such a case, for the purposes of

regulation 19(1), the Advisory Commission shall be deemed to

have been set up on the date on which that sixty (60) day period

expired.

(7)

In the case of paragraph (b) of sub-regulation (1), the

Advisory Commission shall deliver an opinion on how to resolve the

question in dispute in accordance with regulation 19(1).

(1)

If an Advisory Commission is not set up within

the period provided for in sub-regulation (4) of regulation 11, the

relevant affected person may apply to the Chairman of the Board of

Governors of the Malta Arbitration Centre established in terms of the

Arbitration Act to set up the Advisory Commission.

Where the Commissioner has failed to appoint at least

one (1) independent person of standing and a substitute, the affected

person may request the Chairman of the Board of Governors of the

Malta Arbitration Centre to appoint an independent person of standing

and a substitute from the list referred to in regulation 14.

If the Commissioner and the competent authorities of all

the other Member States concerned have failed to do so, the affected

person may request the Chairman of the Board of Governors of the

Malta Arbitration Centre and the competent courts of the other

Member States concerned or to any other body or person designated in

their national laws for the carrying out of such function to appoint the

two (2) independent persons of standing from the list referred to in

regulation 14. Those independent persons of standing shall appoint the

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chairperson by drawing lots from the list of independent persons

according to sub-regulation (3) of regulation 13.

If more than one affected person is involved in the

proceedings, referrals to appoint the independent persons of standing

and their substitutes shall be submitted to the Chairman of the Board

of Governors of the Malta Arbitration Centre by those affected persons

who are resident in Malta. If only one affected person is involved, such

a referral shall be submitted to the Chairman of the Board of

Governors of the Malta Arbitration Centre if the Commissioner has

failed to appoint at least one (1) independent person of standing and a

substitute.

(2)

The appointment of the independent persons and their

substitutes under sub-regulations (1) shall be referred to the Chairman

of the Board of Governors of the Malta Arbitration Centre only after

the end of the one hundred and twenty (120) day period referred to in

sub-regulation (4) of regulation 11, and within thirty (30) days after

the end of that period.

(3)

The Chairman of the Board of Governors of the Malta

Arbitration Centre shall adopt a decision under sub-regulation (1) and

notify it to the applicant. A request to the Chairman of the Board of

Governors of the Malta Arbitration Centre for an appointment of an

independent person in terms of this regulation shall be filed with the

Registrar of the Malta Arbitration Centre against the payment of such

fees as may be provided for in terms of the Arbitration Act.

(4)

The Chairman of the Board of Governors of the Centre

shall proceed to make the appointment and for this purpose he shall

have the same powers that are vested in him under the Arbitration Act

in cases where he is empowered to appoint arbitrators because the

parties to a domestic arbitration have failed to agree in this respect.An

appointment made by the Chairman of the Board of Governors of the

Malta Arbitration Centre in terms of this regulation shall be final.

The Chairman of the Board of Governors of the Malta

Arbitration Centre shall inform the Commissioner, who in turn shall

inform the competent authority of the other Member States concerned

without delay.

(1)

The Advisory Commission set up in accordance

with regulation 11 shall have the following composition

(a)

one (1) Chairperson;

(b)

one (1) representative of the competent authority

of each of the Member States concerned

Provided that on agreement between the

competent authorities, the number of such representatives may

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be increased to two (2) for each competent authority; and

(c)

one (1) independent person of standing, who shall

be appointed by the competent authority of each of the Member

States concerned from the list of independent persons of

standing nominated by the Member States

Provided that on agreement between the

competent authorities, the number of such persons appointed

may be increased to two (2) for each competent authority.

(2)

The rules for the appointment of the independent persons

of standing shall be agreed by the Commissioner together with the

competent authorities of the other Member States concerned.

Following the appointment of the independent persons of standing, a

substitute shall be appointed for each of them according to the rules for

the appointment of the independent persons in cases where the

independent persons are prevented from carrying out their duties.

(3)

Where the rules for the appointment of independent

persons of standing have not been agreed to in accordance with sub-

regulation (2), the appointment of such persons shall be carried out by

drawing lots.

(4)

Except where the independent persons of standing have

been appointed by the Chairman of the Board of Governors of the

Malta Arbitration Centre as provided in regulation 12, or by the

competent court or national appointing body of another Member State

as provided in the law of that other Member State by means of

provisions corresponding to regulation 12, the Commissioner may

object to the appointment of any particular independent person of

standing for any reason agreed in advance between the competent

authorities concerned or for any one (1) of the following reasons

(a)

that person belongs to or is working on behalf of

one of the tax administrations concerned or was in such a

situation at any time during the previous three (3) years;

(b)

that person has, or has had, a material holding in or

voting right in, or is or has been an employee of or adviser to any

affected person concerned, at any time during the last five (5)

years prior to the date of his appointment;

(c)

that person does not offer a sufficient guarantee of

objectivity for the settlement of the dispute or disputes to be

decided;

(d)

that person is an employee with an enterprise that

provides tax advice or otherwise gives tax advice on a

professional basis, or was in such a situation at any time during

a period of at least three (3) years prior to the date of his

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appointment.

(5)

The Commissioner may request that a person of standing

who has been appointed in accordance with sub-regulation (2) or (3),

or his substitute, shall disclose any interest, relationship or any other

matter that is likely to affect that person's independence or impartiality

or that might reasonably create an appearance of bias in the

proceedings. For a period of twelve (12) months after the opinion of the

Advisory Commission was delivered, an independent person of standing

who is part of the Advisory Commission shall not be in a situation that

would have given cause to a competent authority to object to his

appointment as provided for in sub-regulation (4) had he been in that

situation at the time of appointment to that Advisory Commission.

(6)

The representatives of the competent authorities and the

independent persons of standing appointed in accordance with sub-

regulation (1) shall elect a Chairperson from the list of persons

referred to in regulation 14. Unless the representatives of the

competent authority of each of the Member States concerned and the

independent persons of standing agree otherwise, the Chairperson

shall be a judge.

(1)

For the purpose of the list of independent persons

of standing referred to in regulation 13, the Commissioner shall

nominate at least three (3) individuals who are competent and

independent, and who can act with impartiality and integrity.

(2)

The Commissioner shall notify the Commission of the

names of the independent persons of standing whom he has

nominated. The Commissioner shall also provide the Commission with

complete and up-to-date information regarding those persons'

professional and academic background, their competence, their

expertise and any conflicts of interest that they may have. The

Commissioner may specify in the notification which of those persons

may be appointed as a Chairperson.

(3)

The Commissioner shall inform the Commission of any

changes to the list of independent persons without delay.

(4)

The Commissioner shall put in place procedures for

removing any person whom he has appointed from the list of

independent persons of standing if that person ceases to be

independent.

(5)

Where, taking into consideration the relevant provisions

of this regulation, the Commissioner has reasonable cause to object to

an independent person of standing appointed by the competent

authority of a Member State remaining in the above mentioned list for

reasons of lack of independence, he shall inform the Commission and

provide appropriate evidence to support its concern.

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(6)

Where the Commissioner is informed by the Commission

of an objection to an independent person of standing appointed by him

and of supporting evidence, he shall within six (6) months take the

necessary steps to investigate the complaint, and shall decide whether

to retain or remove that person from the list. The Commissioner shall

then notify the Commission accordingly without delay.

(7)

The list of independent persons of standing referred to in

regulation 13 shall consist of the independent persons of standing

nominated by the Commissioner in accordance with this regulation and

of all the other independent persons of standing nominated by the other

Member States concerned in accordance with their respective national

laws.

(1)

The Commissioner may agree with the competent

authorities of the other Member States concerned to set up an

Alternative Dispute Resolution Commission instead of an Advisory

Commission to deliver an opinion on how to resolve the question in

dispute. The Commissioner may also agree with the competent

authorities of the other Member States concerned to set up an

Alternative Dispute Resolution Commission in the form of a

committee that is of a permanent nature, known as a "Standing

Committee".

(2)

Except for the rules regarding the independence of its

members set out in regulations 13(4) and (5), the Alternative Dispute

Resolution Commission may differ regarding its composition and form

from the Advisory Commission. An Alternative Dispute Resolution

Commission may apply, where appropriate, any dispute resolution

processes or technique to solve the question in dispute in a binding

manner. As an alternative to the type of dispute resolution process

applied by the Advisory Commission, i.e. the independent opinion

process, any other type of dispute resolution process, including the

"final offer" arbitration process (otherwise known as "last best offer"

arbitration), can be agreed by the Commissioner under this regulation

together with the competent authorities of the other Member States

concerned and applied by the Alternative Dispute Resolution

Commission.

(3)

The Commissioner shall agree on the Rules of

Functioning in accordance with regulation 16, together with the

competent authorities of the other Member States concerned.

(4)

Regulations 17 and 18 shall apply to the Alternative

Dispute Resolution Commission unless otherwise agreed to in the

Rules of Functioning referred to in regulation 16.

(1) Within the one hundred and twenty (120) day period

provided for in regulation 11(4), the Commissioner shall notify the

affected person with the following

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(a)

the Rules of Functioning for the Advisory

Commission or the Alternative Dispute Resolution

Commission;

(b)

the date by which the opinion on the resolution of

the question in dispute shall be adopted;

(c)

references to any applicable legal provisions in

Maltese law and to any applicable agreements or conventions.

(2)

The Rules of Functioning shall be signed by the

Commissioner together with the competent authorities of the other

Member States concerned. The Rules of Functioning shall provide in

particular

(a)

the description and the characteristics of the

question in dispute;

(b)

the terms of reference on which the competent

authorities of the Member States concerned agree as regards the

legal and factual questions to be resolved;

(c)

the form of the dispute resolution body, which

shall be either an Advisory Commission or an Alternative

Dispute Resolution Commission, as well as the type of process

for any Alternative Dispute Resolution, if the process differs

from the independent opinion process applied by an Advisory

Commission;

(d)

the time frame for the dispute resolution

procedure;

(e)

the composition of the Advisory Commission or

Alternative Dispute Resolution Commission (including the

number and names of the members, details of their competence

and qualifications, and disclosing any conflicts of interest of the

members);

(f)

the rules governing the participation of the

affected person(s) and third parties in the proceedings,

exchanges of memoranda, information and evidence, the costs,

the type of dispute resolution process to be used, and any other

relevant procedural or organisational matters;

(g)

the logistical arrangements for the Advisory

Commission's proceedings and delivery of its opinion

Provided that if an Advisory Commission is set up

to deliver an opinion under regulation 11(1)(a), only the

information referred to in paragraphs (a), (d), (e) and (f) of this

sub-regulation shall be set out in the Rules of Functioning.

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(3)

Where the Rules of Functioning are incomplete or were

not notified to the affected person, Standard Rules of Functioning

established by the Commission in accordance with Council Directive

(EU) 2017/1852 of 10 October 2017 on tax dispute resolution

mechanisms in the European Union shall apply.

(4)

Where the Commissioner has not notified the Rules of

Functioning to the affected person in accordance with sub-regulations

(1) and (2), or where the competent authorities of any one (1) of the

other Member States concerned have not notified the Rules of

Functioning to the affected person, the independent persons of standing

and the Chairperson shall complete the Rules of Functioning on the

basis of the standard rules referred to in sub-regulation (3) and shall send

them to the affected person within two (2) weeks from the date that the

Advisory Commission or Alternative Dispute Resolution Commission

was set up.

(5)

Where the independent persons and the Chairperson have

not agreed on the Rules of Functioning or have not notified them to the

affected person, the affected person or affected persons may submit an

application to the Civil Court, First Hall, or to the competent court in

one (1) of the other Member States concerned in order to obtain an

order for the implementation of the Rules of Functioning.

(1)

Except as provided in sub-regulation (2), and

unless the Commissioner has agreed otherwise with the competent

authorities of the other Member States concerned, the following costs

shall be shared equally among the Member States concerned

(a)

the expenses of the independent persons of

standing, which are to be an amount equivalent to the average

of the usual amount reimbursed to high ranking civil servants of

the Member States concerned; and

(b)

the fees of the independent persons, where

applicable, which are to be limited to one thousand euro

(€1,000) per person per day for every day on which the

Advisory Commission or Alternative Dispute Resolution

Commission meets.

(2)

The Commissioner shall not bear any costs that are

incurred by the affected person.

(3)

Where the affected person has made

(a)

a notification of withdrawal of complaint under

regulation 9 or under corresponding provisions of the national

law of any other Member State concerned; or

(b)

a request under the provisions of regulation 11(1)

or under corresponding provisions of the national law of any

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other Member State concerned following a rejection made

under regulation 10(1) or under corresponding provisions of the

national law of any other Member State concerned, and the

Advisory Commission has decided that the relevant competent

authorities were correct in rejecting the complaint,

and the competent authorities of the Member States concerned so

agree, all the costs referred to in sub-regulation (1)(a) and (b) shall

be borne by the affected person.

(1)

For the purposes of the procedure referred to in

regulation 11, where the Commissioner so agrees with the competent

authorities of the other Member States concerned, the affected

person(s) may provide the Advisory Commission or Alternative

Dispute Resolution Commission with any information, evidence or

documents that may be relevant for the decision.

(2)

The affected person(s) and the Commissioner shall

provide any information, evidence or documents upon request by the

Advisory Commission or Alternative Dispute Resolution Commission.

However, the Commissioner may refuse to provide information to the

Advisory Commission in any one (1) of the following cases, where

(a)

obtaining the information requires carrying out

administrative measures that are against Maltese national law;

(b)

the information cannot be obtained under Maltese

national law;

(c)

the information concerns trade secrets, business

secrets, industrial secrets, professional secrets or trade

processes;

(d)

the disclosure of the information is contrary to

public policy.

(3)

Affected persons may, at their request and with the

consent of the Commissioner and the competent authorities of the

other Member States concerned, appear or be represented before an

Advisory Commission or Alternative Dispute Resolution Commission.

Affected persons shall appear or be represented before it upon request

by the Advisory Commission or Alternative Dispute Resolution

Commission.

(4)

The independent persons of standing or any other

member shall be subject to obligations of professional secrecy in

relation to information they receive in their capacity as members of an

Advisory Commission or Alternative Dispute Resolution Commission.

(5)

Affected

persons,

and

where

applicable,

their

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representatives, shall undertake to treat any information (including

knowledge of documents) that they receive during such proceedings as

secret. The affected person and his representatives shall make a

declaration to this effect to the Commissioner and the competent

authorities of the other Member States concerned when so requested

during the proceedings.

(6)

The provisions of the Professional Secrecy Act and of

article 257 of the Criminal Code shall apply in respect of any breach of

the secrecy obligations imposed under this regulation.

(7)

The Commissioner shall inform the Commission of any

measures taken in order to penalise any breach of secrecy obligation

provided for in this regulation.

(1)

An Advisory Commission or Alternative Dispute

Resolution Commission shall deliver its opinion to the Commissioner

and to the competent authorities of the other Member States concerned

no later than six (6) months after the date on which it was set up.

Where the Advisory Commission or Alternative Dispute Resolution

Commission considers that the question in dispute is such that it would

need more than six (6) months to deliver an opinion, this period may

be extended by three (3) months. The Advisory Commission or

Alternative Dispute Resolution Commission shall inform the

Commissioner, the competent authorities of the other Member States

concerned and the affected persons of any such extension.

(2)

The Advisory Commission or Alternative Dispute

Resolution Commission shall base its opinion on the provisions of the

applicable agreement or convention referred to in regulation 2(2) as

well as on any applicable national rules.

(3)

The Advisory Commission or Alternative Dispute

Resolution Commission shall adopt its opinion by a simple majority of

its members. Where a majority cannot be reached, the vote of the

Chairperson shall determine the final opinion. The Chairperson shall

communicate the opinion of the Advisory Commission or Alternative

Dispute Resolution Commission to the Commissioner and to the

competent authorities of the other Member States concerned.

(1)

The Commissioner shall agree with the competent

authorities of the other Member States concerned on how to resolve

the question in dispute within six (6) months of the notification of the

opinion of the Advisory Commission or Alternative Dispute

Resolution Commission.

(2)

The Commissioner together with the competent

authorities of the other Member States concerned may take a decision

which deviates from the opinion of the Advisory Commission or

Alternative Dispute Resolution Commission. However, if the

Commissioner fails to reach an agreement as to how to resolve the

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question in dispute, the Commissioner shall be bound by that opinion.

(3)

The Commissioner shall notify the final decision on the

resolution of the question in dispute to the affected person without

delay. In the absence of such notification within thirty (30) days of the

decision having been taken, the affected person shall be entitled to file

an application in the Civil Court, First Hall requesting the Court to

order the Commissioner to provide a copy of the final decision without

further delay.

(4)

The final decision shall be binding on the Commissioner

and shall not constitute a precedent.

(5)

The final decision shall be implemented subject to the

affected person(s) accepting the final decision and renouncing the

right to any domestic law remedy within sixty (60) days from the date

when the final decision was notified, where applicable.

(6)

Except where the relevant court or other judicial body of

a Member State concerned decides according to its applicable national

rules on remedies and applying the criteria under regulation 13 that

there was lack of independence, the final decision shall, where

applicable, be implemented under the Income Tax Acts and the

taxation under those Acts shall be amended accordingly, irrespective

of any time limits prescribed by Maltese law.

(7)

Where the Commissioner fails to implement the final

decision, the affected person shall be entitled to present an application

to appeal as if the Commissioner’s failure were an assessment issued

under the Income Tax Management Act and as if the Commissioner

has refused an objection to an assessment duly filed by the affected

person, and the relevant provisions of that Act relating to appeals shall

apply mutatis mutandis

Provided that the time within which an appeal may be

made in accordance with article 35(1) of the Income Tax Management

Act shall run from the expiration of six (6) months from the date on

which the affected person is served with a copy of the final decision.

(1)

The fact that the action that gave rise to a question

in dispute has become final under the Income Tax Acts shall not

prevent the affected persons from having recourse to the procedures

provided for in these regulations.

(2)

The submission of the question in dispute to the mutual

agreement procedure or to the dispute resolution procedure under

regulations 10 and 11 respectively shall not prevent the Commissioner

from initiating or continuing judicial proceedings or proceedings for

administrative and criminal penalties in relation to the same matters.

(3)

Affected persons may have recourse to the remedies

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available to them under the national law of the Member States

concerned. However, where the affected person has commenced

proceedings to seek such a remedy, the terms of periods referred to in

regulations 8 and 10(1) respectively shall commence from the date on

which a judgement delivered in those proceedings has become final or

on which those proceedings have otherwise been definitively

concluded or where the proceedings have been suspended.

(4)

Where a decision on a question in dispute delivered by

the Administrative Review Tribunal or the Court of Appeal has been

rendered final and conclusive in terms of article 38 of the Income Tax

Management Act

(a)

before an agreement has been reached by the

competent authorities of the Member States concerned under

the mutual agreement procedure under regulation 10 on that

question in dispute, the Commissioner shall notify the

competent authorities of the other Member States concerned of

that decision and that the procedure is to be terminated as from

the date of such notification;

(b)

before the affected person has made a request

under regulation 11(1), the provisions of regulation 11(1) do not

apply if the question in dispute had remained unresolved during

the whole of the mutual agreement procedure under regulation

10, in which case the Commissioner shall inform the other

competent authorities of the Member States concerned of the

effect of that decision;

(c)

the dispute resolution process under regulation 11

is to be terminated if the decision was rendered at any time after

an affected person has made a request under regulation 11(1)

but before the Advisory Commission or the Alternative Dispute

Resolution Commission has delivered its opinion to the

competent authorities of the other Member States concerned, in

conformity with regulation 19, in which case the Commissioner

is to inform the competent authorities of the other Member

States concerned and the Advisory Commission or the

Alternative Dispute Resolution Commission of the effect of that

decision.

(5)

The submission of a complaint as provided under

regulation 4 shall put an end to any other ongoing proceedings under

the mutual agreement procedure or dispute resolution procedure under

an agreement or convention that is being interpreted or applied in

relation to the relevant question in dispute. Such other ongoing

proceedings concerning the relevant question in dispute shall come to

an end with effect from the date of the first receipt of the complaint by

any one (1) of the competent authorities of the Member States

concerned.

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(6)

By way of derogation from regulation 11, the

Commissioner may deny access to the dispute resolution procedure

under that regulation in cases where penalties were imposed under the

Income Tax Acts in relation to the adjusted income or capital for tax

fraud, wilful default and gross negligence. Where judicial or

administrative proceedings were commenced that could potentially

lead to such penalties, and these proceedings are being conducted

simultaneously with any of the proceedings referred to in these

regulations, the Commissioner may stay the proceedings under these

regulations as from the date of acceptance of the complaint until the

date of the final outcome of those proceedings.

(7)

The Commissioner may deny access to the dispute

resolution procedure under regulation 11 on a case-by-case basis

where a question in dispute does not involve double taxation. In such a

case, the Commissioner shall inform the affected person and the

competent authorities of the other Member States concerned without

delay.

(1)

Where the affected person is either

(a)

an individual; or

(b)

not a large undertaking and does not form part of a

large group (both as defined in Directive 2013/34/EU of the

European Parliament and of the Council),

the affected person may submit the complaints, replies to a request

for additional information, withdrawals and requests specified in

regulations 4, 5(2), 9 and 11(1), respectively or in provisions of the

law of any Member State concerned that correspond to those

regulations ("communications"), by way of derogation from those

provisions, only to the competent authority of the Member State in

which the affected person is resident.

(2)

When the Commissioner receives any such

communication, he shall, within two (2) months, notify the competent

authorities of all the other Member States concerned at the same time.

(3)

Once a notification of any such communication has been

made by the competent authority that receives it to the other competent

authorities of the Member States concerned, the affected person shall

be deemed to have submitted the communication to all the Member

States concerned as of the date of such notification.

(4)

When the Commissioner receives from an affected

person referred to in sub-regulation (1) additional information

requested under regulation 5(2), he shall transmit a copy to the

competent authorities of all the other Member States concerned at the

same time.

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(5)

Once a submission has been made to the competent

authorities of all Member States of a copy of additional information

received by the Commissioner as aforesaid or received by the

competent authority of any other Member State concerned in terms of

provisions of the law of that Member State corresponding to regulation

5(2), it shall be deemed that additional information has been received

by all Member States concerned as at the date of such receipt of

information.

(1) Advisory Commissions and Alternative Dispute

Resolution Commissions shall issue their opinions in writing.

(2)

The Commissioner may agree with the competent

authorities of the other Member States concerned to publish the final

decisions referred to in regulation 20 in their entirety, subject to the

consent of each one (1) of the affected persons concerned.

(3)

Where the competent authorities or affected person

concerned do not consent to publishing the final decision in its

entirety, the Commissioner shall publish an abstract of the final

decision. That abstract shall contain a description of the issue and the

subject matter, the date, the tax periods involved, the legal basis, the

industry sector, and a short description of the final outcome. It shall

also include a description of the method of arbitration used. The

Commissioner shall send the information to be published in

accordance with this sub-regulation to the affected person before its

publication. The affected person may, no later than 60 days from the

receipt of such information, request the Commissioner not to publish

information that concerns any trade, business, industrial or professional

secret, information that concerns a trade process, or information that is

contrary to public policy.

(4)

For the purpose of communicating the information

referred to in sub-regulations (2) and (3), the Commissioner shall use

the standard forms referred to in paragraph (4) of article 18 of Council

Directive (EU) 2017/1852 of 10 October 2017 on tax dispute

resolution mechanisms in the European Union.

(5)

The Commissioner shall notify the information to be

published in accordance with sub-regulation (2) to the Commission

without delay.

(6)

The final decision, whether in its entirety or an abstract

thereof, shall be published on the website of the Office of the

Commissioner for Revenue.