The second stage peer review report on Oman’s implementation of the minimum standard under BEPS Action 14 (making dispute resolution mechanisms more effective) was published by the OECD’s Inclusive Framework on 13 September 2022.
The report notes that Oman has concluded more than 30 tax treaties and has a small inventory of mutual agreement procedure (MAP) cases, with relatively few new cases submitted each year. The first stage peer review report noted that Oman met the majority of the elements of the Action 14 minimum standard. The government has been working to address the remaining issues, and the second stage peer review report concludes that Oman has resolved most of the issues identified.
The report notes that all Oman’s tax treaties contain a provision relating to the MAP, and generally the MAP articles are in line with paragraphs 1 to 3 of Article 25 of the OECD Model Tax Convention.
The treaty network is also mainly in line with the requirements of the Action 14 minimum standard, but around 40% of the treaties do not contain the equivalent of the second sentence of Article 25(1) of the OECD Model because the timeline to file a MAP request is shorter than the required three years from the first notification of the relevant action. Around 20% of the treaties do not include a provision for mutual agreements to be implemented regardless of any time limits in domestic law; or the alternative provisions for Article 9(1) and Article 7(2) to set a time limit for transfer pricing adjustments. Also, more than 40% of the treaties do not contain the provision stating that the competent authorities may consult to eliminate double taxation in cases not provided for in the tax treaty.
Oman is amending a number of its treaties using the multilateral instrument (MLI) to implement treaty-based provisions arising from the OECD project on base erosion and profit shifting (BEPS). In the case of treaties that cannot be modified using the MLI, Oman intends to update the treaties through bilateral negotiations, although the peer review report notes that there is no specific plan in place for those negotiations.
The report notes that Oman provides access to the MAP in all eligible cases; and has clear and comprehensive guidance on the availability of the MAP and its practical application. There is however no documented bilateral consultation or notification process for situations where the competent authority considers that the issue raised by taxpayers in a MAP request is not justified.
The report states that Oman should make available adequate resources for the competent authority to enable it to identify and resolve MAP cases in a timely and efficient manner. The resources would enable the competent authority to resolve pending cases in a timely way and to prepare for a possible future increase in the number of MAP cases.
The report notes that the competent authority operates fully independently from the audit function of the tax authorities and adopts a co-operative approach to resolve MAP cases in an effective and efficient manner. The organisation is adequate and appropriate performance indicators are used for the MAP function, although the MAP statistics were not submitted for the Reporting Framework within the relevant deadline for the years under review.
