A consultation document issued by the OECD on 18 November 2020 invites input from interested parties on proposals for the 2020 review of the Action 14 minimum standard on making dispute resolution mechanisms more effective. A number of possible additional requirements could be included in the minimum standard as set out below:

Use of bilateral APAs

Under the Action 14 minimum standard the roll-back of bilateral APAs is permitted only if an APA programme is already in place. To ensure more efficient prevention of tax disputes and more certainty a requirement could be included in the minimum standard for jurisdictions to establish a bilateral APA programme.

Expand access to training on international tax issues

Mandatory training for tax audit personnel can increase the efficiency of tax auditors and reduce the number of tax adjustments leading to lengthy MAP processes, so training could be required in the standard.

Define criteria to ensure that access to MAP is granted in eligible cases

There are currently no commonly agreed criteria specifying when exactly a case would be eligible for the MAP process, as well as what information and documentation taxpayers should include in their MAP request.

Suspend tax collection for the duration of the MAP process under the same conditions as in domestic rules

Countries could be required under the minimum standard to suspend tax collection under the same rules that apply when taxpayers pursue available domestic remedies.

Align interest and penalties in proportion to the result of the MAP process

Linking interest and penalties in a rational way to the outcome of the MAP process would be a fair solution. Interest and penalties would be imposed only to the extent that the relevant taxation on which they are based is still chargeable following a MAP agreement.

Proper legal framework to ensure the implementation of all MAP agreements

In some jurisdictions the domestic time limits may be an obstacle to the implementation of MAP agreements, because some tax treaty do not contain the equivalent of Article 25(2) of the OECD Model ensuring that MAP agreements can be implemented regardless of domestic time limits. This situation could be dealt with by adding the equivalent of Article 25(2), second sentence, to tax treaties, possibly in combination with other measures.

Allow multi-year resolution through MAP of recurring issues with respect to filed tax years

Multi-year resolution of recurring issues through a MAP would increase the efficiency of the process. The relevant time limits would still apply to each year.

Implement MAP arbitration to guarantee effective resolution of cases

A number of jurisdictions have expressed strong support for the adoption of MAP arbitration to improve the efficiency and effectiveness of the MAP, while a number of others have clearly indicated that MAP arbitration raises constitutional issues and cost, capacity and resource constraints.

MAP Statistics Reporting Framework

The framework could additionally include reporting of additional data relating to pending or closed MAP cases; and provision of relevant information on other practices that impact MAP and APA statistics.

Public Consultation Meeting

A public consultation meeting on the 2020 review of BEPS Action 14 will be held (virtually) in early 2021 so external stakeholders can provide input.