On 9 April 2020 the OECD published a further batch of reports in relation to stage 2 of the peer reviews of the implementation of Action 14 of the action plan on base erosion and profit shifting (BEPS).
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.
The second stage of peer reviews looked at recommendations made in the first stage and at the extent to which they have been implemented by the countries. Measures introduced in the period from 1 April 2017 to 30 September 2018 were reviewed during the second stage peer reviews.
The seven reports published on 9 April 2020 relate to Austria, France, Germany, Italy, Liechtenstein, Luxembourg and Sweden.
The peer review reports concluded that positive steps have been taken in all seven jurisdictions although not all have progressed to the same extent. All seven of the jurisdictions have signed the multilateral instrument (MLI) to include tax treaty related BEPS measures into their bilateral double tax treaties, and five of them have also ratified the MLI. All the jurisdictions have in place a documented process for notification and bilateral consultation where the competent authority considers that an objection by a taxpayer is not justified.
Five of the countries have increased the number of personnel in their competent authority function or made other organisational improvements such as more face to face meetings with other competent authorities, to ensure more efficient handling of MAP cases.
Some of the countries have decreased the average time they required to complete a MAP case and some have updated and clarified their MAP guidance. Austria has legislated to ensure that MAP agreements can be implemented regardless of the domestic time limits where the treaty does not provide for this, while most of the other countries already have this provision.