Oecd Mutual Agreement

The process of mutual unification (POP) remains the most widely used way and the best way to eliminate double taxation. The effective use of PPIs by different instruments has been of interest to the OECD and the EU for more than 20 years. According to bePS, the number of double taxes is increasing and the number of POPs continues to increase. There is a growing emphasis on ensuring better dispute resolution techniques to more effectively eliminate double taxation. This article describes some of the features of the instruments currently available. Overall, it is clear that the MLI extends taxpayers` access to three years, both in terms of extending the period during which taxpayers must initiate a POB period, provides an effective two-year period for the relevant authorities to resolve a case (after that date, it may be subject to arbitration). The MLI has led to a greater homogeneity of approach on key issues such as arbitration and, above all, the adoption of a single map article for covered tax treaties. The BEPS 14 (Making Dispute Resolution Mechanisms More Effective) report requires legal systems to set a minimum standard to ensure that they resolve treaty disputes in a timely, efficient and effective manner. All members of the Integrated Framework for BEPS (IF) are committed to implementing the minimum standards of Action 14, which include a rapid and comprehensive report on the statistics of the Mutual Agreement Procedure (MAP), in accordance with an agreed report framework.

Pop 2019 statistics will be published as part of this new framework. They cover all members who joined the IF before 2020. International double taxation can occur when two jurisdictions attempt to tax the same transactions or activities. While tax treaties directly resolve most of these cases, international double taxation may persist if two jurisdictions disagree on the interpretation or application of a treaty provision. The Article of the Mutual Agreement Procedure (MAP) of a tax treaty therefore provides for a mechanism for resolving these cross-border tax disputes. One element of the BEPS minimum standards for Action 14 is that legal systems attempt to resolve mutual agreement cases (“MAP”) within an average of 24 months. In order to monitor compliance with this element, members of the integrated beps framework have committed to reporting their POP statistics in accordance with an agreed reporting framework. In addition, some might argue that arbitration has the advantage of encouraging Member States to settle disputes before the two-year deadline expires, which would be more successful than the failure of the convention. However, statistics also show that 202 cases had exceeded the two-year deadline, while it had been cancelled with the taxpayer`s consent.