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OECD plans to improve dispute resolution under BEPS action 14

OECD plans to improve dispute resolution under BEPS

The OECD publish details of the peer review process designed to improve dispute resolution under the MAP process in double tax treaties.


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In a very welcome development the OECD has set out how it intends to implement the recommendations of BEPS action 14 to improve the Mutual Agreement Procedure (MAP) process for resolving double taxation disputes. The documents published on 20 October set out in detail 21 elements to deliver the minimum standard that participating countries are required to implement together with 12 best practices. The key mechanism through which the OECD proposes to deliver change is a programme of peer reviews that will monitor how tax administrations operate the process. This programme will kick off in 2016 with the objective of publishing its first reports in the second half of 2017. Finally the report also includes details of the methodology jurisdictions will use to collate MAP statistics and sets out a template for issuing guidance to business about the operation of the process.

At a time where the number of disputes is continuing to grow as the changes introduced through the other BEPS actions start to be implemented it is good to see that the OECD is starting to deliver the Action 14 recommendations. Our current experience suggests that to date there have been very limited improvements in the operation of the MAP process which, whilst effective in some jurisdictions, still needs significant improvement to ensure that taxpayers can effectively access their rights to relief from double taxation. The combination of these proposals and the expectation that more widespread binding mandatory arbitration will be introduced through the Multilateral Instrument offers the enticing prospect of greater predictability and certainty for business. However in order to see any change in practice tax administrations need to respond positively to the proposals and make the required process changes along with devoting sufficient resources to give effect to them.


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Peter Steeds

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