By Doug Connolly, MNE Tax
Five of eight countries in the OECD’s latest round of peer review reports failed to resolve mutual agreement procedure (MAP) cases within the average 24-month timeframe sought by the OECD base erosion and profit shifting (BEPS) Action 14 minimum standard on dispute resolution. The review assessed compliance with the MAP minimum standard by Australia, Ireland, Israel, Japan, Malta, Mexico, New Zealand, and Portugal.
Mexico and Portugal took the longest, averaging about 38 months each, more than one year over the target. Ireland was the next slowest at 32 months on average overall. Ireland was also running more than a year behind in its transfer pricing cases, which, at 38 months average time to completion, took longer than the other cases.
Israel and Japan came closer to meeting the target but also missed the mark at 31 and 27 months, respectively. Three countries meeting the 24-month target were Australia, Malta (with only one case), and New Zealand.
The eight countries generally fared better on the other elements of the minimum standard for making dispute resolution more effective. Only one country, Portugal, failed to meet the standard for preventing disputes, i.e., through advance pricing agreements (APAs), due to its failure to allow rollback of APAs.
Except for Mexico, the countries also met the requirements regarding the availability and access to MAP. While Mexico provides access to MAP in all eligible cases, concerns remained regarding gaps in associated guidance.
All eight countries met the fourth element of the Action 14 minimum standard relating to the implementation of MAP agreements.
Doug Connolly
Doug Connolly is Editor-in-Chief of MNE Tax. He has more than 10 years of experience covering tax legal developments, previously working with both a Big Four firm and a leading legal publisher. He holds a law degree from American University Washington College of Law.
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