On 10 October 2018 the OECD released the mutual agreement procedure (MAP) statistics for 2017.
Under Action 14 of the action plan on base erosion and profit shifting (BEPS) recommendations were made on improving the effectiveness and timeliness of dispute resolution mechanisms. The minimum standard under action 14 required jurisdictions to try to resolve MAP cases in an average time of 24 months. The countries joining the Inclusive Framework on BEPS have agreed to report their MAP statistics each year under the agreed reporting framework. The OECD has now published the MAP statistics for 85 jurisdictions, including almost all the MAP cases worldwide.
More cases are being resolved than in the past but the global inventory is still rising. The inventory of ongoing MAP cases has decreased in about half of the reporting jurisdictions and has increased in the other half. New transfer pricing MAP cases have risen by 25% compared to the previous year and other MAP cases have risen by 50%. The increase in new MAP cases is likely to be due to factors such as the effects of the new reporting framework, increased awareness of MAP by taxpayers and a focus in some countries on particular international tax risks such as those relating to salaries and pensions.
The statistics show that on average transfer pricing MAP cases are taking more time than other MAP cases and the average times have not improved on the previous year. The average time taken to resolve MAP cases is approximately 30 months for transfer pricing MAP cases and 17 months for other MAP cases. The average times for resolving a MAP case vary greatly from one country to another and range from 3 months to 59 months. In 2017 around 60% of the reporting jurisdictions met the target of 24 months on average for resolving all their MAP cases.
In more than 80% of transfer pricing MAPs concluded in 2017 the relevant issue was resolved. The relevant issue was also resolved in more than 75% of non-transfer pricing MAP cases. Around 65% of the transfer pricing MAP cases closed in 2017 resulted in an agreement fully eliminating double taxation and in almost 15% of these cases unilateral relief was given. In non-transfer pricing MAP cases closed in 2017 the relevant issue was resolved in 50% of the cases and unilateral relief was given in 25% of the cases.
The statistics also include a summary of MAP cases for each jurisdiction per treaty partner. This applies to all MAP cases that started after 2015.