May 27, 2021

Anna Murray 

According to the intergovernmental economic organization, the Organisation for Economic Co-operation and Development (OECD), which released May 25 its peer review report, Slovenia and Turkey both successfully met the minimum standard targets relating to the prevention of tax disputes, availability and access to mutual agreement procedure (MAP) and its resolution and implementation.

The latest peer reviews of jurisdictions' compliance of the minimal standard for making dispute resolution more effective under the OECD's base erosion and profit shifting (BEPS) initiative for Greece, Hungary, Iceland, and Slovakia. Estonia, Romania, Slovenia, and Turkey were the other jurisdictions examined.

OECD/G20 Inclusive Framework on Base erosion and profit shifting (BEPS) devotes to over 135 countries and jurisdictions in collaboration on implementing tax planning strategies. Under BEPS Action 14, jurisdictions ought to commit to implementing a minimum standard to improve the resolution of tax disputes between jurisdictions. Therefore, the OECD’s peer review evaluated how far these eight tax countries had proceeded in adopting recommendations from their previous stage's peer review. Although not all show the same amount of progress, the MAP guidelines have been released or modified in all eight jurisdictions.

The OECD’s report stated that Iceland lacked a bilateral APA program, which was necessary for avoiding tax controversies. Under Romania's APA framework, rollbacks of bilateral APAs were not provided. Greece, Hungary, and the Slovak Republic failed to resolve MAP cases within 24 months in a more timely, effective, and efficient manner. Meanwhile, Estonia, Greece, Iceland, and Romania lacked a formal bilateral process for situations where the responsible authority defends the MAP request against a taxpayer's objection.

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