Around 85 percent of the MAPs concluded for transfer pricing cases in 2019 fully resolved the issue, which reflects an improvement in the collaborative approach taken by competent authorities.
The OECD has published the latest 2019 mutual agreement procedure (MAP) statistics covering 105 jurisdictions and almost all MAP cases worldwide.
The figures show that the number of cases keeps increasing. Approximately seven MAP cases were started every day in 2019 (three transfer pricing cases and four other cases). This amounts to almost 2,700 new cases in 2019 alone. This is more than in 2018 and means the number has nearly doubled since 2016.
The statistics reveal that the number of cases closed is increasing as well, but at a slower pace. Competent authorities were able to close more cases in 2019 than in 2018, but the increase cannot keep up with the increase in new cases. As a result, the inventories are increasing in the majority of jurisdictions, despite the fact that competent authorities have increased their capacity and closed approximately 50 percent more transfer pricing cases and 70 percent more other cases in 2019 than in 2016.
MAP outcomes are generally positive, according to the statistics. Around 85 percent of the MAPs concluded for transfer pricing cases in 2019 fully resolved the issue, which reflects an improvement in the collaborative approach taken by competent authorities.
Finally, the statistics reveal that MAP cases still take a long time to be resolved. On average, MAP cases closed in 2019 lasted for 25 months (31 months for transfer pricing cases, 22 months for other cases). Also, while it is not possible to estimate the time that will be necessary to close still pending cases, the data shows that more than one-fifth of the 2019 end inventory has been pending for more than four years.
The author is Alex Hunter, Editor, TP News. He oversees and updates the publication and also regularly writes news stories about transfer pricing and international tax law. Alex is reachable at editor@transferpricingnews.com