SECTION 12. ARBITRATION

.01 In General. The mutual agreement procedure article in arbitration treaties requires that the competent authorities refer certain MAP cases to mandatory arbitration in the event direct consultation does not lead to a mutual agreement within a prescribed time period. The mutual agreement procedure article in arbitration treaties sets forth detailed rules to be followed regarding the resolution of cases that are eligible for arbitration as prescribed by the relevant treaty. This section addresses general procedural issues associated with mandatory arbitration that is undertaken as part of the MAP process. Taxpayers

should consult the mutual agreement procedure article under the applicable U.S. tax treaty and any ancillary agreements to determine whether it is an arbitration treaty and the extent to which mandatory arbitration applies under such treaty.

.02 Commencement Date and the Be- ginning of Arbitration Proceedings . Determining the “commencement date” under an arbitration treaty is important because arbitration begins within a specified time period, typically two years, following the commencement date. In general, the commencement date for a case is the earliest date on which the information necessary to undertake substantive consideration for a mutual agreement has been received by both competent authorities. The U.S. competent authority generally takes the position that it has received information necessary to undertake substantive consideration for a mutual agreement only when it has received a complete MAP request as described in this revenue procedure. The U.S. competent authority will notify the U.S. taxpayer when the commencement date is established.

.03 Non-disclosure Agreement . The arbitration proceedings do not begin before the date by which both competent authorities have received properly executed nondisclosure agreements from all concerned persons, their authorized representatives, and their agents. The U.S. competent authority will provide the taxpayer with a form for the non-disclosure agreement.

.04 Notification of Unsuitability for Ar- bitration. U.S. arbitration treaties allow both competent authorities to agree, at any time prior to the arbitration start date, that a particular case is not suitable for arbitration. The U.S. competent authority will notify the taxpayer of any such determination.

.05 Taxpayer Participation. The taxpayer may submit its analysis and views of the case to the U.S. competent authority to the extent permitted under the applicable U.S. tax treaty.

.06 Notification of Arbitration Panel’s Determination . The U.S. competent authority will notify the taxpayer of the arbitration panel’s determination. If the taxpayer accepts the arbitration panel’s determination, its terms will constitute a MAP resolution.

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.07 Other Taxpayer Rights. If a taxpayer rejects the determination of an arbitration panel, does not accept the determination within the deadline mandated by the applicable arbitration guidance, or has been notified that a case has been determined not to be suitable for arbitration, it may pursue any rights that remain available under domestic law.