Resolving Cross-Border Tax Disputes Through the Mutual Agreement Procedure

The OECD reached another milestone recently in connection with its base erosion and profit shifting project when it released the first two batches of peer review reports under BEPS action 14 (dispute resolution). The reports evaluate compliance with what action 14 defines as the minimum standard countries should have in place to resolve international tax disputes using their treaties’ mutual agreement procedures.


Overall, the countries evaluated met many elements of the minimum standard; however, the reports include more than 280 recommendations, showing there is room for improvement. Notably, almost every country evaluated has struggled to resolve transfer pricing disputes in two years. As explained below, the emphasis in action 14 on mandatory binding arbitration and timely resolving MAP disputes pressures tax authorities to resolve cases efficiently. Taxpayers with active or potential MAP cases can leverage that pressure by carefully following procedures and working with competent authorities to resolve disputes.


In this article, the authors discuss how taxpayers can leverage the emphasis on the mutual agreement procedure and mandatory binding arbitration in action 14 of the base erosion and profit-shifting project to efficiently resolve active or potential MAP cases.


Copyright 2018 Jason Osborn, Scott Stewart, and John Horne.


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