Quantera Global is pleased with the invitation of the OECD to comment on the BEPS Action 14 Consultation Document released on 18 November 2020. In this consultation document the OECD presented its proposals to make dispute resolutions more effective. Please see a summary of our remarks below.
- We welcome the introduction of an obligation to establish a bilateral advance pricing agreement (APA) program. All jurisdictions should provide taxpayers access to a bilateral APA. The option to pursue a bilateral APA should be a standard option.
- We support the training of tax officials on international tax issues as a best practice. We however believe it would be more effective to introduce mandatory early involvement of the competent authority (CA) in cases that could end up in a MAP. The CA should be independent from the local auditors.
- Unfortunately, we still see cases where taxpayers are being pressured to agree to not request a MAP as part of a local settlement. This needs to be solved at the level of the auditor and not at the level of the taxpayers’ rights.
- Standardized documentation requirements for MAP requests will help taxpayers to prepare and process a MAP request.
- We would support a standard approach to deal with tax collection for the duration of a MAP irrespective of the local domestic rules.
- Countries that enter into a MAP should be prepared to implement the agreements and the local regulations should not prohibit a proper implementation.
- We believe that including multi-year resolution through MAP into the minimum standard would contribute to the effective resolution of cases. Parties should have the opportunity to consider the appropriateness of a multi-year resolution at any time during a pending MAP.
- We welcome including arbitration in the minimum standard. This will certainly have an impact on the resolution of MAPs. However it would need to be combined with additional measures that would prohibit undue delay by limiting the possible extension of time limits.
- We believe that strong commitments by tax authorities are necessary to allocate additional resources to the MAP and APA programs when it shows that existing resources will not be able to meet the intended goals.
If you would like to read the full memo with our comments, please click here.