The OECD on October 10 published its 2017 mutual agreement procedure (MAP) statistics covering 85 tax jurisdictions.
According to the 2017 MAP statistics, new transfer pricing MAP cases are up by 25 percent and other MAP cases by 50 percent. Anecdotal evidence suggests that the increase in new MAP cases is due to a range of factors including the effects of the new reporting framework and increased awareness of and expectations from taxpayers about MAP, the OECD noted.
Transfer pricing MAP cases continue to take more time than other MAP cases. Countries are taking approximately 30 months for transfer pricing MAP cases and 17 months for other MAP cases. About 60 percent of reporting jurisdictions met the 24 months target across all their MAP cases.
The OECD’s work on base erosion and profit shifting (BEPS) Action 14 sought to improve the overall effectiveness and timeliness of tax treaty dispute resolution. BEPS Action 14 minimum standard requires jurisdictions to seek to resolve MAP cases within an average time-frame of 24 months.
A majority of MAP cases (80 percent) concluded in 2017 resolved the issue for transfer pricing cases and more than 75 percent for other cases. Approximately 65 percent of transfer pricing MAP cases closed were resolved with an agreement fully eliminating double taxation and a unilateral relief was granted in almost 15 percent of the cases.