Tax authorities have to establish the facts and then apply the relevant laws. Domestic rules govern how the tax authorities have to proceed when they establish the facts. These rules might be different in the two contracting states of tax treaties. This can lead to the result that both countries have to start from different fact patterns when they apply the tax treaty. The application of different tax treaty provisions in both countries and sometimes double taxation might be the consequences. Michael Lang deals with the question whether in such cases of differences at the factual level a mutual agreement procedure under Art 25 OECD MC may be initiated.
