On 22 November 2021 the OECD released updated mutual agreement procedure (MAP) statistics for 2020. The statistics cover 118 jurisdictions and include almost all MAP cases globally. The collection of the MAP statistics is one element in the minimum standard under Action 14 of the OECD/G20 project on base erosion and profit shifting (BEPS) and the agenda to improve the effectiveness of tax dispute resolution mechanisms,

The MAP is an important part of the tax dispute resolution mechanism and is essential for a well-functioning network of tax treaties. The minimum standard under BEPS action 14 aims to improve the resolution of tax-related disputes and provides for peer reviews that examine important features of the tax dispute resolution mechanism in each country to monitor compliance with the minimum standard.

The MAP statistics are an important part of the monitoring by the Inclusive Framework of BEPS Action 14, as they provide a way of measuring progress in making dispute resolution mechanisms more effective and highlight the areas where further work is needed.

There are various trends shown by the 2020 MAP statistics. They show that the MAP activity is concentrated in a relatively small proportion of the countries surveyed. Around 2,500 new MAP cases were commenced in 2020, with 25 jurisdictions accounting for 95% of those MAP cases and 40 jurisdictions involved in the remaining 5% of the cases.

The number of new MAP cases increased in 2020, this being due to a continued increase in new transfer pricing cases. Around 5% fewer MAP cases were closed in 2020, but this still means that a significant number of cases were closed despite the pandemic. This was due to the ability of tax authorities to adapt to the new situation, holding digital rather than physical meetings with taxpayers, using other forms of communication more often, and prioritising the simpler cases. However as fewer cases were closed there has been an increase in inventories of MAP cases at the 2020 year end and this may require focused action in the next few years to clear the backlog.

Of the MAP cases concluded in 2020, around 75% fully resolved the relevant issue in both transfer pricing and other cases. Around 3% of MAP cases were closed without an agreement. Around 11% of cases were withdrawn by taxpayers in 2020, compared to 6% withdrawn in 2019.

The MAP cases are still open for a long period before they are resolved. Generally the MAP cases closed in 2020 needed around 35 months on average for transfer pricing cases and approximately 18 months on average for other cases for resolution. There were delays in some jurisdictions, in particular for the more complex MAP cases, and cases were also delayed by the more difficult communications with the treaty partner countries due to the pandemic. Around 15% of the MAP inventory at the end of 2020 involves MAP cases that have been ongoing for at least five years.