The Organisation for Economic Co-operation and Development (OECD) has released statistics on the Mutual Agreement Procedure (MAP) for 2017. The MAP is a dispute resolution mechanism used to resolve double taxation issues between countries. The statistics provide insight into the efficiency and effectiveness of the MAP process.
In 2017, there were 2,574 MAP cases ongoing, representing a 25% increase from the previous year. The majority of cases were related to transfer pricing issues, with 80% of cases involving transfer pricing adjustments. The countries with the most MAP cases were the United States, France, and Germany.
The statistics also highlighted the average time it takes for MAP cases to be resolved. The average time for MAP cases to be resolved was 19 months, which is an improvement from the previous year`s average of 22 months. The OECD has set a target of 24 months for MAP cases to be resolved, meaning that the process is becoming more efficient.
Furthermore, the statistics showed that 88% of MAP cases were resolved through agreement between the countries involved. This is a positive outcome as it demonstrates that countries are working together to resolve disputes rather than resorting to litigation.
The OECD has also implemented several measures to improve the MAP process. One of these measures is the introduction of mandatory binding arbitration in MAP cases under the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (BEPS). This is seen as a positive step as it provides a more definitive resolution to disputes.
In conclusion, the statistics on the OECD Mutual Agreement Procedure for 2017 demonstrate that the MAP process is becoming more efficient and effective. With the introduction of mandatory binding arbitration under BEPS, it is likely that the MAP process will continue to improve in the future. It is important that countries continue to work together to resolve disputes and ensure that double taxation is avoided.