OECD MAP stats for 2015 and the future impact of the BEPS action plan

On December 5, 2016, the OECD released its report on annual statistics of MAP caseloads of all its member countries and of non-OECD economies that agree to provide those statistics for the 2015 reporting period. The report shows that MAP inventories in OECD countries, in the aggregate, continue their upward trend from 2006 onward.

At the end of the 2015 reporting period, there was a total inventory of 6,176 MAP cases outstanding among OECD member countries. This represents a 14 percent increase over the 2014 reporting period, which showed a total inventory of 5,429 cases. Among the OECD partner economies (Argentina, China, Costa Rica, Lithuania, and South Africa) the huge part of the increase in the additional 125 MAP cases was mostly attributable to China, which saw the number of MAP cases outstanding increase from 55 in the prior year to 99 for the 2015 reporting period.

For those countries that reported them, the average cycle time for cases completed, closed, or withdrawn decreased in 2015 (20.47 months) compared with 2014 (23.79 months).

The countries that show the largest increases in the number of new cases filed in the 2015 reporting period suggest that BEPS and other trends — such as the EU focus on tax rulings — may be affecting taxpayers’ ability to resolve cross-border tax disputes: Belgium (which saw the number of new MAP cases filed more than double, increasing from 205 to 428), Luxembourg (which likewise saw almost a doubling of new MAP cases, from 116 to 212), the Netherlands and Switzerland have been singled out by the European Commission for their tax ruling practices and have a reputation as favorable tax regimes. Other countries may be becoming more assertive in assessing tax liabilities on profits that taxpayers have historically allocated to these tax-favorable jurisdictions. At the same time, none of the other, higher-taxed OECD countries saw large increases in the number of new MAP cases filed, with most either seeing a slight decrease (such as in the United States, France, and Germany) or staying relatively constant.

This is the last year the MAP statistics will be provided in the format used since 2006. Beginning next year, OECD member countries, along with countries that belong to the BEPS inclusive framework, will be reporting MAP statistics based on the revised reporting framework developed for monitoring the implementation of the action 14 minimum standard.

Under this minimum standard, jurisdictions will be required to provide timely and complete reporting of MAP statistics following an agreed template and reporting framework. Countries will have to report a lot more information on pending MAP cases, including the number of cases closed during the reporting period and a description of the outcome, such as whether the taxpayer was denied MAP access, whether the case was withdrawn by the taxpayer, or whether the case was resolved via domestic remedy. During the associated peer review process, the taxpayers will also be invited, through a specific questionnaire, to provide input on some key areas such as access to MAP, clarity and availability of MAP guidance, and the timely implementation of MAP agreements.