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OECD invites taxpayer input on sixth batch of peer reviews of dispute resolution processes under BEPS Action 14

Executive summary

On 26 July 2018, the Organisation for Economic Co-operation and Development (OECD) announced that it is now gathering input on the implementation of the Base Erosion and Profit Shifting (BEPS) Action 14 minimum standard in relation to the review of the sixth batch of jurisdictions (Argentina, Chile, Colombia, Croatia, India, Latvia, Lithuania and South Africa) and invites taxpayers to submit their input related to their experiences in these jurisdictions, via an electronic questionnaire, by 24 August 2018.1

The exercise is part of the process of the mutual agreement procedure (MAP) peer review and monitoring process that the OECD launched in December 2016 under Action 14 of the BEPS project in relation to more effective dispute resolution mechanisms.

Business taxpayers are encouraged to take this opportunity to submit their views. The OECD will continue to launch peer reviews of further batches of jurisdictions and publish peer review reports in accordance with the assessment schedule of peer reviews published by the OECD in October 2016 (the Schedule).

Detailed discussion

Background

The BEPS project recognizes that uncertainty and the possibility of unrelieved double taxation may hinder foreign investment and economic growth, and therefore it contains a number of measures aimed at improving the international dispute resolution systems.

In particular, Action 14 of the BEPS Action Plan contains a MAP peer review and monitoring process. The peer review process is conducted in two stages. Under stage 1, implementation of the Action 14 minimum standard by a jurisdiction member of the Inclusive Framework on BEPS is being reviewed by the Forum on Tax Administration MAP Forum (FTA MAP Forum).2 Stage 2 focuses on monitoring the execution of additional implementation issues identified in the jurisdiction’s stage 1 report. A BEPS Action 14 peer review schedule covers stage 1 of the peer review process and catalogues jurisdictions into ten batches for review.

The peer reviews of stage 1 were launched in December 2016, assessing the first batch of jurisdictions in accordance with the Schedule. The peer review reports of the first batch (Belgium, Canada, the Netherlands, Switzerland, the United Kingdom and the United States) were released on 26 September 2017.3 The peer review reports of the second batch (Austria, France, Germany, Italy, Liechtenstein, Luxembourg and Sweden) were released on 15 December 20174 while the peer review reports of the third batch (Czech Republic, Denmark, Finland, Korea, Norway, Poland, Singapore and Spain) were released on 12 March 2018.5 The peer review of the fourth batch countries (Australia, Ireland, Israel, Japan, Malta, Mexico, New Zealand and Portugal) is underway.6 Taxpayers were also invited to complete a questionnaire and submit their input related to their experiences in the noted eight jurisdictions included in the fifth batch (Estonia, Greece, Hungary, Iceland, Romania, Slovak Republic, Slovenia and Turkey) by 9 April 2018.

The OECD is now gathering business input that will be incorporated into the stage 1 peer reviews of the sixth batch of jurisdictions (Argentina, Chile, Colombia, Croatia, India, Latvia, Lithuania and South Africa) and invites taxpayers to submit input on specific issues relating to:

  • Access to MAP
  • Clarity and availability of MAP guidance
  • Timely implementation of MAP agreements

For that purpose, the OECD has released a specific questionnaire for taxpayers to download, complete and submit7 to the OECD no later than 24 August 2018.

Questionnaire focus areas

The questionnaire, with four to six pages for submission of data, is made up of four key sections:

  • Part I collects general and demographic data
  • Part II collects data related to instances where access to MAP was not granted, despite being requested
  • Part III collects data related to clarity and availability of MAP guidance
  • Part IV collects data related to the implementation of MAP agreements

Taxpayers (whether an individual business or part of a wider business organization) are asked to complete one questionnaire per covered jurisdiction.

Next steps

The jurisdictions assessed in the first three batches of the peer review process are already working to address deficiencies identified in their respective reports and are moving to stage 2. In stage 2 of the peer review process, a jurisdiction’s efforts to address any shortcomings identified in its stage 1 peer review report will be monitored. Assessed jurisdictions shall submit an update report to the OECD’s Forum on Tax Administration within one year of the OECD Committee on Fiscal Affairs’ adoption of the stage 1 peer review report.

The reports on the fourth batch are expected to be released on 30 August 2018. The OECD will continue to announce peer review input gathering and publish stage 1 peer review reports in accordance with their schedule.

Implications

The survey is an important opportunity for business taxpayers to provide input to the OECD’s future work plan on the MAP. As taxpayers are the main users of dispute resolution mechanisms, this input is key for the review process. Companies are encouraged to complete the survey as the results will help inform the direction of the work.

Endnotes

1. http://www.oecd.org/tax/beps/oecd-invites-taxpayer-input-on-sixth-batch-of-dispute-resolution-peer-reviews-beps-action-14.htm.

2. http://www.oecd.org/tax/forum-on-tax-administration/about/.

3. See EY Global Tax Alert, OECD releases first batch of peer review reports on Action 14, dated 27 September 2017.

4. See EY Global Tax Alert, OECD releases second batch of peer review reports on Action 14, dated 15 December 2017.

5. See EY Global Tax Alert, OECD releases third batch of peer review reports on Action 14, dated 14 March 2018.

6. See EY Global Tax Alert, OECD invites taxpayer input on fourth batch of peer reviews of Dispute Resolution under BEPS Action 14, dated 11 December 2017.

7. Complete documents, in Word format, should be emailed to fta.map@oecd.org.

EYG no. 010495-18Gbl

Download this Tax Alert as a PDF file.

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