To avoid being taxed in several countries, the states concerned can enter into so-called tax treaties that explain how different situations should be handled in order to avoid double taxation. However, these agreements do not always work smoothly, for eaxample when the states have different interpretations or assess a situation in unsimilar ways. This may lead to persons being double taxed, despite the agreement.
Organization for Economic Cooperation and Development, OECD, has prepared a model treaty that states are recommended to follow when tax treaties are concluded. Under Article 25 of the Model Tax Convention, the competent authority, which in Sweden is the Swedish Tax Authority and the Ministry of Finance, has the option to enter into so-called mutual agreements. These mutual agreements are the subject of Ann-Sophie Sallander’s research.
In her thesis, Ann-Sophie Sallander classifies different types of mutual agreements and map the actual procedure at the Swedish competent authority. Ann-Sophie Sallander further studies if the mutual agreements are compatible with other Swedish legislation such as constitutional law, administrative judicial procedural law, administrative law and secrecy. The compliance with international law is also studied.
The results show that some parts of the process of mutual agreements conflict with other internal legislation. Although the procedure has benefits for those who are liable to pay tax, it is not fully compatible with the rest of the legal system. In order to overcome these problems, changes in tax treaties are required, in internal legislation or in procedure at the competent authority.
“Since the tax treaties are negotiated between two different states, it is difficult to make changes in them, because it would require a new negotiation,” Ann-Sophie Sallander explains. “Nor is it easy to make changes in the national legislation, since the mutual agreements in many cases are in conflict with Swedish constitutional law, which is difficult to change. This means that there are conflicting interests between on one hand that the purpose of the agreements are met, and on the other hand that the process is lawful,” she continues.
Mutual agreements have not been studied to any great extent in previous Swedish research.
Faculty opponent was Associate Professor Nina Ewalds, Stockholm University. Examining committee was Professor Mattias Dahlberg, Uppsala University, Professor Christina Moëll, Lund University, and Associate professor/Justice of the Court of Appeal, Mona Aldestam.