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OECD Launches Global Review Of MAP Program

by Ulrika Lomas,, Brussels

21 October 2016

The OECD has released four documents that will form the basis of the mutual agreement procedure (MAP) peer review and monitoring process under Action 14 of the base erosion and profit shifting (BEPS) Action Plan.

The MAP enables parties to a bilateral treaty to cooperate on resolving issues surrounding the interpretation and application of the substantive treaty provisions, in particular to resolve double tax disputes.

The October 2015 report on BEPS Action 14, on making dispute resolution mechanisms more effective, encourages countries to commit to implement a minimum standard to ensure that they resolve treaty-related disputes in a timely, effective, and efficient manner. All members of the inclusive framework on BEPS have committed to implementing the Action 14 minimum standard.

The documents, which were released on October 20, 2016, includes:

  • Terms of Reference which translate the minimum standard approved in the final Action 14 report into a basis for peer review;
  • Assessment Methodology for the peer review and monitoring process;
  • A MAP statistics reporting framework, which, according to the OECD, reflects the collaborative approach competent authorities will take to resolve MAP cases and will ensure greater transparency on statistical information relating to the inventory, types, and outcome of MAP cases through common reporting of MAP cases going forward; and
  • Guidance on information and documentation to be submitted with a MAP request.

The peer review and monitoring process will be conducted by the OECD's Forum on Tax Administration MAP Forum, with all members participating on an equal footing. The review will take place on the basis of the existing treaties and there is no requirement for jurisdictions to negotiate any new treaties. Furthermore, the methodology contains the possibility for developing countries to defer the peer review, recognizing their capacity constraints and often relatively small MAP pipeline, the OECD said.

The OECD said that it will also publish updated MAP profiles of all members of the Inclusive Framework on BEPS, which contain information about each member's Competent Authority's contact details, domestic guidelines for MAP, and other useful information for both tax authorities and taxpayers. The peer reviews will be conducted in batches, with the first batch commencing in December 2016.

TAGS: tax | business | tax avoidance | law | Organisation for Economic Co-operation and Development (OECD) | enforcement | agreements | multinationals | tax planning | transfer pricing | tax reform | trade | European Union (EU) | Europe | BEPS

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