International tax disputes resolution: Arbitration

Disputes, which can be seen in all areas of life and which need to be resolved in case of existence, are also a phenomenon encountered in tax applications arising from international business and transactions. In this context, taxes can also be the subject of international disputes. As it is known, taxes, which are an important source of financing for countries, are the subject of international disputes, which every state would like to solve in their own favor and therefore it is difficult to resolve. Although countries try to solve the problems related to taxation with some agreements that they have already made between them, tax problems such as double taxation continue as a result of the inability to interpret or implement these agreements correctly. Therefore, for the elimination of international tax problems, alternative solutions have been proposed by both governments and international organizations over the years. The most applied system among alternative solutions is the 'Mutual Agreement Procedure', and this method has started to be insufficient over time. This situation has led countries to seek new alternative solution methods. Among these alternative solution methods, arbitration is a method that is also used. However, it has not been accepted as a separate and independent way among the states applying this method. Arbitration, which is complementary to the Mutual Agreement Procedure, is accepted as an economical and fast solution method in the resolution of disputes due to its characteristic. The conclusion reached from the comparison of the main resolution methods used for the resolution of international tax disputes; if the arbitration institution is brought to an orderly and transparent structure, it can result in an advantage for everyone who is a part of the dispute. In this study, alternative ways and arbitration practice used in the resolution of international disputes at the level of different countries have been evaluated. It has been concluded that there is no legal obstacle regarding the arbitration method, which is not applied in terms of tax disputes in Turkey. Within the scope of the whole study and literature review; it is concluded that if the arbitration institution can be institutionalized as a regular and transparent method in a structure explained in detail in the last section, this method will play an active role in the resolution of international tax disputes. Keywords: Arbitration, International Tax Disputes, Mutual Agreement Procedure.