This Directive establishes an EU‑wide mechanism to resolve disputes arising from the interpretation or application of bilateral tax treaties and the Union Arbitration Convention, with particular focus on eliminating double taxation. Affected persons may lodge a complaint within three years; competent authorities must acknowledge receipt, pursue a mutual agreement procedure within two years (extendable by one year) and, where no agreement is reached, refer the matter to an Advisory Commission or an Alternative Dispute Resolution Commission composed of Member State representatives and independent persons to deliver an opinion within prescribed time limits.

Final decisions are binding on the Member States and become enforceable once the affected person accepts and renounces domestic remedies; the Directive provides safeguards on confidentiality, proportional cost‑sharing, simplified access for individuals and SMEs and limited derogations for fraud or criminal proceedings. The Commission keeps lists and a public repository, and will review implementation by June 2024; Member States were to transpose the Directive by 30 June 2019, applying to complaints from 1 July 2019 for tax years starting on or after 1 January 2018.