Executive summary

On 4 March 2025, the Organisation for Economic Co-operation and Development (OECD) released the third batch of reports reflecting the outcome of Stage 1 of the new simplified peer review process on the implementation of the Base Erosion and Profit Shifting (BEPS) Action 14 minimum standard on dispute resolution under the mutual agreement procedure (MAP). This simplified review process, which began in July 2023, is designed for jurisdictions that do not have "meaningful MAP experience" and that opt not to undergo the full peer review process.

The simplified peer review is conducted in two stages: the initial Stage 1 Peer Review and the subsequent Stage 2 Peer Monitoring. The third batch of Stage 1 reports covers 10 jurisdictions: Benin, Burkina Faso, Dominica, Grenada, Iceland, Montenegro, Peru, Saint Lucia, Samoa and Senegal.

Detailed discussion

Background

In October 2015, the OECD released the final reports on all 15 action points of the BEPS Action Plan.¹ Action 14, on making dispute resolution mechanisms under MAP more effective, establishes a minimum standard subject to peer review, together with additional best practices.

In October 2016, the OECD released the peer review documents for Action 14, including the Terms of Reference and Assessment Methodology.² The Terms of Reference translated the Action 14 minimum standard into 21 elements and the best practices into 12 items. The Assessment Methodology provided procedures for undertaking a peer review and monitoring in two stages. Stage 1 involves a review of how an Inclusive Framework member implements the minimum standard based on its legal framework for MAP and its application in practice. Stage 2 involves a review of the measures the member takes to address any shortcomings identified in Stage 1.

After several years of experience conducting peer reviews, in November 2020, the OECD released a Consultation Document seeking stakeholder input on proposals for the review of the Action 14 minimum standard.³

On 24 January 2023, the OECD and G20 Inclusive Framework on BEPS released a New Assessment Methodology for continuing the BEPS Action 14 peer review process, together with additions to the framework for annual reporting of MAP statistics and a new framework for annual reporting of Advance Pricing Arrangement (APA) statistics.⁴

The New Assessment Methodology sets out how the monitoring of the Action 14 minimum standard is conducted from 2023 onward (the Continued Monitoring Process). Although the original Assessment Methodology allowed for deferral of the peer review of certain jurisdictions, such deferral is not provided for under the Continued Monitoring Process. Therefore, all Inclusive Framework member jurisdictions (whether previously peer reviewed or otherwise) now are subject to monitoring under a full or simplified peer review process. The full peer review process generally follows the process in the original Assessment Methodology. The simplified process is available for jurisdictions that are considered not to have "meaningful MAP experience" and that do not choose to undergo the full peer review process.

The simplified process is limited to reviewing a jurisdiction's tax treaty network, MAP profile, MAP guidance, compliance with the MAP Statistics Reporting Framework and practical application of the minimum standard (where applicable). The goal of the simplified process is to support these jurisdictions in developing a more robust MAP program for handling future MAP cases.

The simplified Action 14 peer review process commenced in January 2023. On 16 September 2024, the OECD released the first two batches of Stage 1 reports on Action 14 simplified peer reviews, covering 20 jurisdictions: Albania, Antigua and Barbuda, Belize, Botswana, Colombia, Cook Islands, Costa Rica, Dominican Republic, Egypt, Jamaica, Jordan, Lithuania, Mauritius, Nigeria, North Macedonia, Pakistan, Serbia, Seychelles, Sri Lanka and Zambia.⁵

Third batch of simplified peer reviews

On 4 March 2025, the OECD released the third batch of Stage 1 reports on the Action 14 simplified peer review process, covering Benin, Burkina Faso, Dominica, Grenada, Iceland, Montenegro, Peru, Saint Lucia, Samoa and Senegal. The work on this batch of peer reviews began in July 2023 and the reports were finalized and approved by the Inclusive Framework on 28 November 2024.

According to the OECD press release, the results from these simplified peer reviews indicate that most jurisdictions participating in the process either have, or want to put in place, a policy framework for MAP and are willing to take the necessary measures to achieve the efficient, effective and timely resolution of disputes.

In terms of implementation of the Action 14 minimum standard into tax treaties, the BEPS Multilateral Instrument (BEPS MLI) has been signed by Burkina Faso, Iceland, Peru, and Senegal, and also has been ratified by Burkina Faso, Iceland, and Senegal. This is expected to align a substantial number of their treaties. Bilateral negotiations also are being initiated for the remaining treaties.

In terms of specific processes addressed in the peer reviews, Peru has a documented bilateral notification/consultation process that is applied in cases where its competent authority does not consider an objection to be justified. Iceland, Peru and Senegal either have closed their MAP cases within the target average time of 24 months or otherwise have a competent authority that is considered adequately resourced. In contrast, Dominica, Grenada, Montenegro, Saint Lucia and Samoa had no MAP experience, but they do have a policy of providing access to MAP in eligible cases.

In addition, Dominica, Montenegro, Saint Lucia, Samoa and Senegal ensure that MAP agreements can be implemented notwithstanding domestic time limits. Further, Iceland, Peru, and Samoa have issued or updated their MAP guidance.

Next steps

With the initial Stage 1 Peer Review now complete for the third batch of jurisdictions, the next step is initiation of the Stage 2 Peer Monitoring for these jurisdictions. This phase is to begin two years after the approval of the Stage 1 reports and will focus on monitoring the progress made by each jurisdiction in implementing any recommendations received in Stage 1 review and in enhancing their dispute resolution mechanisms.

The OECD will continue to publish peer review reports under Stage 1 of the simplified review process and Cycle 1 of the full peer review process in batches in accordance with the Action 14 peer review assessment schedule.

Implications

The BEPS Action 14 peer review reports provide information regarding the current operation of tax dispute prevention and resolution mechanisms in the reviewed jurisdictions. In today's constantly changing environment, companies should continue exploring the various dispute prevention and resolution mechanisms available to them to enhance tax certainty in relevant jurisdictions.