The French tax administration published Guideline 14 A-8-05 of 8 August 2005, which reproduces the exchange of letters dated 22 December 2003 and 1 March 2005 between the French and Spanish competent authorities on the interpretation of Art. 26(3) of the France-Spain tax treaty of 10 October 1995 (mutual agreement procedure, corresponding to Art. 25(3) of the OECD Model).

Pursuant to Spanish legislation, advance pricing agreements (APAs) may generally not have a retroactive effect. In order to alleviate this restriction, the exchange of letters determines that taxpayers who had obtained a bilateral APA from the tax authorities may, under Art. 26(3) of the tax treaty, request the competent authority to extend the application of the APA to the previous accounting periods which served as a reference in the determination of the APA. Such extension will not be automatic, and will be granted only where the competent authority is satisfied that the circumstances in all accounting periods are similar.