OECD invites taxpayer input on fourth batch of peer reviews of Dispute Resolution under BEPS Action 14

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13 December 2017

Executive summary

The Organisation for Economic Co-operation and Development (OECD) has announced that it is now gathering input on the implementation of the Base Erosion and Profit Shifting (BEPS) Action 14 minimum standard in the fourth batch of jurisdictions (Australia, Ireland, Israel, Japan, Malta, Mexico, New Zealand and Portugal) and invites taxpayers to submit their input related to their experiences in these jurisdictions, via an electronic questionnaire, by 22 December 2017.¹

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 other 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 chance of unrelieved double taxation may hinder foreign investment and economic growth and therefore, the BEPS project contains a number of measures aimed at improving the system of international dispute resolution.

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 is evaluated for BEPS Inclusive Framework members.² Stage 2 focuses on monitoring the follow-up of the recommendations resulting from the stage 1 report. The Schedule covers stage 1 of the peer review process and catalogues the assessed jurisdictions into eight batches for review.

The peer reviews of stage 1 were launched in December 2016 from the first batch of jurisdictions in accordance with the Schedule. The reviews of the first batch (Belgium, Canada, Netherlands, Switzerland, United Kingdom, and United States) have already been completed, and the reports were published in September 2016.³ The peer reviews of the second batch (Austria, France, Germany, Italy, Lichtenstein, Luxembourg, and Sweden) have also been completed, and reports are expected to be published by the OECD during December of this year.⁴ The peer review of the third batch countries (Czech Republic, Denmark, Finland, (South) Korea, Norway, Poland, Singapore, and Spain) is underway.⁵

The OECD is now gathering input for the stage 1 peer reviews of the fourth batch of jurisdictions (Australia, Ireland, Israel, Japan, Malta, Mexico, New Zealand and Portugal) 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 submit⁶ to the OECD no later than 22 December 2017.

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 six jurisdictions assessed in the first batch 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 report on the second batch is expected to be released during December of this year. The OECD will continue to announce peer review input gathering and publish stage 1 peer review reports in accordance with the 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 the 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.

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ENDNOTES

¹ https://search.oecd.org/tax/beps/oecd-invites-taxpayer-input-on-fourth-batch-of-dispute-resolution-peer-reviews-beps-action-14.htm.

² http://www.oecd.org/tax/beps/inclusive-framework-on-beps-composition.pdf.

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 invites taxpayer input on peer reviews of Dispute Resolution under BEPS Action 14, dated 1 February 2017.

⁵ See EY Global Tax Alert, OECD seeks taxpayer input on BEPS Action 14 peer reviews, dated 14 June 2017.

⁶ Complete documents, in Word format, should be emailed to fta.map@oecd.org.

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CONTACTS

For additional information with respect to this Alert, please contact the following:

Ernst & Young LLP (United Kingdom), London