On October 20, 2016 the OECD released key documents, approved by the Inclusive Framework on BEPS, that will form the basis of the Mutual Agreement Procedure (MAP) peer review and monitoring process under Action 14 of the BEPS Action Plan.
In a press release issued in this respect the OECD states the following:
“The Action Plan on Base Erosion and Profit Shifting identified 15 actions to address BEPS in a comprehensive manner. Recognising that the actions to counter BEPS must be complemented with actions that ensure certainty and predictability for business, Action 14 calls for effective dispute resolution mechanisms to resolve tax treaty-related disputes. The BEPS package endorsed by the G20 Finance Ministers in October 2015 contains the report on Action 14 (Making Dispute Resolution Mechanisms More Effective), which outlines the minimum standards and best practices for resolving treaty-related disputes under the Mutual Agreement Procedure (MAP).
The documents released today form the basis on which this process will be moving forward. The compilation includes the Terms of Reference which translate the minimum standard approved in the final Action 14 report into a basis for peer review; the Assessment Methodology for the peer review and monitoring process and the MAP statistics reporting framework which 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.
Through rigorous peer reviews and continual collection of data, the Action 14 BEPS deliverables seek to eliminate taxation not in accordance with treaty provisions and help resolve any tax-treaty related disputes in a timely and efficient manner. The involvement of the Inclusive Framework throughout the peer review process ensures that the effort to streamline MAP incorporates the experience of both developing and developed countries. The peer review and monitoring process will be conducted by the FTA 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 released today contains the possibility for developing countries to defer the peer review, recognising their capacity constraints and often relatively small MAP pipeline.
Consistent with its efforts to enhance transparency, the OECD will also publish updated MAP profiles of all members of the Inclusive Framework, which contain information about each member's Competent Authorities' contact details, domestic guidelines for MAP and other useful information for both tax authorities and taxpayers. The actual peer reviews will be conducted in batches, with the first batch commencing in December 2016. We will be seeking taxpayer input before the launch of these reviews and a questionnaire for taxpayer input seeking such input will be published shortly, together with a schedule for review.”
The key document titled “BEPS Action 14 on More Effective Dispute Resolution Mechanisms - PEER REVIEW DOCUMENTS” discusses a.o. the following subjects:
· Terms of Reference to Monitor and Review the Implementing of the BEPS Action 14 Minimum Standard to Make Dispute Resolution Mechanisms More Effective
o The Action 14 Minimum Standard for the Resolution of Tax Treaty-Related Disputes
§ Preventing Disputes – Elements of the Minimum Standard
§ Availability and Access to MAP – Elements of the Minimum Standard
§ Resolution of MAP Cases – Elements of the Minimum Standard
§ Implementation of MAP Agreements – Elements of the Minimum Standard
o Output of the Peer Review and Monitoring Process
· Assessment Methodology for the Monitoring and Review of the Implementation of the BEPS Action 14 Minimum Standard to Make Dispute Resolution Mechanisms More Effective
o Peer Review and Monitoring Process
§ Obtaining Inputs for the Stage 1 Peer Review
· Obtaining inputs from the assessed jurisdiction
· Obtaining input from the assessed jurisdiction’s peers
· Obtaining inputs from taxpayers
§ Drafting and Approval of Stage 1 Peer Review Report
· Draft Stage 1 Peer Review report of an assessed jurisdiction
· Approval of the Stage 1 Peer Review report of an assessed jurisdiction by the FTA MAP Forum
§ Adoption of FTA MAP Forum Report on Stage 1 Peer Review Reports by the CFA for Publication
§ Monitoring of Measures taken by Assessed Jurisdiction to Improve the MAP Regime (Stage 2 Peer Monitoring)
· Approval of Stage 2 Peer Monitoring report of an assessed jurisdiction
· Adoption of FTA MAP Forum Update Report on Stage 2 Peer Monitoring Reports by the CFA for Publication
· MAP Statistics Reporting Framework
o MAP Process
§ Starting of MAP case (“start” date)
§ Closing of MAP case (“end” date)
§ Milestone 1(if applicable): Date of position paper
o MAP Statistics Reporting and Publication
· Guidance on Specific Information and Documentation Required to be Submitted with a Request for MAPAssistance
Click here to be forwarded to the document “BEPS Action 14 on More Effective Dispute Resolution Mechanisms - PEER REVIEW DOCUMENTS” as available on the website of the OECD, which will open in a new window.
Click here to be forwarded to the webpage were the OECD will also publish updated MAP profiles of all members of the Inclusive Framework, which contain information about each member's Competent Authorities' contact details, domestic guidelines for MAP and other useful information for both tax authorities and taxpayers.
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