On 22 October 2020 the OECD released a further batch of stage 2 peer review reports on tax dispute resolution mechanisms under BEPS Action 14.

The minimum standard under BEPS action 14 is concerned with improving tax dispute resolution mechanisms. Countries that are members of the OECD’s Inclusive Framework on BEPS are committed to conforming to the minimum standard and are subject to peer reviews to review implementation of measures to achieve this.

Jurisdictions have committed to implement a minimum standard to improve the resolution of tax-related disputes between jurisdictions. The stage 2 peer review monitoring reports issued on 22 October 2020 related to Czech Republic, Denmark, Finland, Korea, Norway, Poland, Singapore and Spain.

These stage 2 reports look at the progress made in implementing recommendations from the stage 1 peer review reports. The stage 2 monitoring covers developments from 1 August 2017 to 28 February 2019 and the mutual agreement Procedure (MAP) statistics relate to 2016, 2017 and 2018.

All eight jurisdictions for which reports have been issued have signed the multilateral instrument (MLI) to implement tax treaty related BEPS provisions into bilateral tax treaties and five of the countries have ratified the MLI. There are also bilateral treaty negotiations either ongoing or concluded.

Denmark, Finland, Korea, Norway, Poland, Singapore and Spain have put in place a documented notification and bilateral consultation process to notify the taxpayer in cases where an issue is not taken up by competent authority.

All eight jurisdictions have added more personnel to their competent authority function or have made organisational improvements to enable them to consider MAP cases in a more timely and effective manner. Denmark, Finland, Korea, Norway, Singapore and Spain have all decreased the average time required to close MAP cases.

Singapore introduced legislative changes to ensure that all MAP agreements can be implemented regardless of domestic time limits if the relevant bilateral tax treaty does not make provision for this. In five of the other seven jurisdictions this is already the case.

The peer review report on Poland notes that Poland has recently included more resources in its competent authority function but the report notes that further resources are required to ensure a timely and effective resolution of MAP cases.