by Julie Martin, MNE Tax
Despite OECD efforts to encourage countries to more swiftly and effectively resolve of cross-border tax disputes, overall mutual agreement proceedure (MAP) inventory continues to increase, OECD statistics released today revealed.
The statistics assess the performance of 89 countries that are members of the “Inclusive Framework on BEPS,” covering almost all MAP cases worldwide. In addition to a global assessment, data were presented on each jurisdiction’s MAP performance.
The OECD blamed the overall rise in unresolved MAP cases on an increasing number of new MAP cases filed, in particular, new transfer pricing MAP cases. The number of transfer pricing MAP cases filed increased by almost 20 percent in 2018 as compared to 2017. For non-transfer pricing cases, the number of new MAP cases increased by more than 10 percent in 2018 over 2017.
The OECD said that most of the 89 tax administrations closed more cases in 2018 than in 2017.
Also, like in 2017, about 60 percent of countries closed MAP cases within 24 months in 2018. The average time to complete a transfer pricing case was 33 months, slightly up over last year. Time to complete other cases was 14 months, slightly lower than last year.
Speaking during an OECD webcast, Achim Pross. Head of the International Co-operation and Tax Administration division within the OECD’s Centre for Tax Policy and Administration, said that of all countries closing 50 or more transfer pricing cases in 2018, Canada moved the quickest, averaging 24.52 months to complete a case. Denmark came in second, closing cases in 27.7 months, followed by the UK, which closed cases on average within 28.58 months.
Canada also had the largest inventory reduction in 2018 of all countries, followed by China and Belgium, Pross said.
Julie Martin
Julie Martin is the founder of MNE Tax. She edits the publication and regularly contributes articles on new developments in cross-border business taxation.
Julie has worked as a tax journalist and editor for more than 13 years. Prior to that, she worked as an in-house tax attorney in New York. She also holds an LLM in taxation from New York University School of Law.
Julie can be reached at [email protected].
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