The Organisation for Economic Co-operation and Development (OECD) has released mutual agreement procedure (MAP) statistics for 2016.
The statistics highlight:
- In comparison with the 2015 MAP statistics, both the number of MAP cases in start inventory and the number of started MAP cases have increased, which results from both an increase in the number of reporting jurisdictions and modified counting rules.
- Approximately 8,000 cases were in the inventory of the reporting jurisdictions as of 1 January 2016 and almost 25% of them were closed during 2016.
- Almost 1,500 cases started on or after 1 January 2016, and approximately 25% of them were already closed in 2016.
- Transfer pricing cases account for slightly more than half of the MAP cases in inventory.
- Transfer pricing cases take more time on average than other cases: approximately 30 months are needed for transfer pricing cases and 17 months for other cases.
- Over 85% of MAPs concluded in 2016 resolved the issue. Almost 60% of MAP cases closed were resolved with an agreement fully resolving the taxation not in accordance with the tax treaty and almost 20% of them were granted a unilateral relief while almost 5% were resolved via domestic remedy. Finally, 5% of the MAP cases closed were withdrawn by taxpayers while approximately 10% were not resolved for various reasons.
The MAP is a formal procedure included in most double taxation agreements worldwide to facilitate the resolution of tax disputes between jurisdictions.
To improve the effectiveness and timeliness of dispute resolution mechanisms, and to enhance tax certainty, Action 14 of the BEPS action plan has required jurisdictions to seek to resolve MAP cases within an average timeframe of 24 months. Members of the Inclusive Framework on BEPS have committed to report their MAP statistics.
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