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OECD: MAP statistics for 2018; transfer pricing case dispute resolutions

OECD: MAP statistics for 2018; transfer pricing case

The Organisation for Economic Cooperation and Development (OECD) today issued a release announcing dispute resolution statistics as part of “Tax Certainty Day.”

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According to the OECD release, tax policymakers, tax administrations, business representatives, and other stakeholders from over 50 countries considered ways to make further improvements in both dispute prevention and dispute resolution. The discussions covered the full suite of “tax certainly tools” available to tax administrations—such as co-operative compliance programmes, advance pricing agreements (APAs), the international compliance assurance programme, joint audit, and the mutual agreement procedure (MAP).

The 2018 MAP statistics released today covered 89 jurisdictions and almost all MAP cases worldwide, and provided detailed information on each jurisdiction as well as aggregated global information, summarized by the OECD as follows:

  • Inventory: New cases keep increasing—compared to 2017, new transfer pricing cases are up by almost 20% and other cases by more than 10%.
    • The majority of tax administrations are closing more cases than before, and the country data show a decrease of inventory in about half of the reporting jurisdictions and an increase in the other half.
    • The aggregated global inventory continues to rise—especially because for transfer pricing cases, the number of cases closed increased at a slower pace than the number of cases started. 
  • Timelines: On average transfer pricing cases continue to take more time with average times being as follows in 2018—approximately 33 months for transfer pricing cases (30 months in 2017) and 14 months for other cases (17 months in 2017).
    • Average times for case resolution vary significantly by jurisdiction, ranging from two (2) to 66 months.
    • Similar to statistics for 2017, about 60% of reporting jurisdictions met the 24-month target across all their cases. 
  • Outcomes: More than 80% of MAPs concluded in 2018 resolved the issue for transfer pricing cases and more than 75% for other cases.
    • Almost 75% of transfer pricing MAP cases closed were resolved with an agreement fully or partially resolving taxation not in accordance with a tax treaty; 5% of them were granted a unilateral relief, and 5% were resolved via domestic remedy.
    • For other cases, these outcomes represent about 50%, 25%, and 3% respectively. Only 2% of the MAP cases were closed because the competent authorities could not find a mutual agreement. 
  • Jurisdiction specific indicators: For the first time, the 2018 MAP statistics compare the reporting jurisdictions’ performance with respect to key indicators such as the time taken to close MAP cases and the number of MAP cases closed compared to a jurisdiction’s caseload, for each type of case. 

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