OECD releases 'BEPS Action 14 on More Effective Dispute Resolution Mechanisms, Peer Review'

For additional information with respect to this Alert, please contact the following:For additional information with respect to this Alert, please contact the following:The Organisation for Economic Co-operation and Development (OECD) released on October 20, 2016, "BEPS Action 14 on More Effective Dispute Resolution Mechanisms, Peer Review Documents (pdf)," (the "Peer Review Documents") which will form the basis of the Mutual Agreement Procedure (MAP) peer review and monitoring process under Action 14 of the Base Erosion and Profit Shifting (BEPS) Action Plan.


In October 2015, the OECD released its final 2015 reports under its Action Plan on BEPS, consisting of Actions 1-15. Concurrently, the G20 Finance Ministers endorsed a BEPS package that included a report on Action 14, titled "Making Dispute Resolution Mechanisms More Effective," in which countries committed to implementing a minimum standard to ensure they resolve treaty-related disputes in a timely, effective and efficient manner.

The purpose of Action 14 is to outline effective dispute resolution mechanisms and peer review procedures to help ensure certainty for taxpayers as they strive to implement other BEPS action items. All members of the BEPS inclusiveness framework are committed to implementing the Action 14 minimum standard and have this implementation reviewed under the agreed to "Terms of Reference" and "Assessment Methodology"..

The Peer Review Documents

This compilation consists of four separate documents:

  1. Terms of Reference to Monitor and Review the Implementing of the BEPS Action 14 Minimum Standard to Make Dispute Resolution Mechanisms More Effective (Terms of Reference)
  2. Assessment Methodology for the Monitoring and Review of the Implementation of the BEPS Action (Assessment Methodology)
  3. MAP Statistics Reporting Framework
  4. Guidance on Specific Information and Documentation Required to be Submitted with a Request for MAP Assistance

The "Terms of Reference" translate the minimum standard approved into a basis for peer review, consisting of 21 elements complemented by 12 best practices. The Terms of Reference assess a Member's legal and administrative framework, including the practical implementation of this framework to determine how its MAP regime performs relative to the 21 elements in four key areas — (A) preventing disputes; (B) availability and access to MAP; (C) resolution of MAP cases; and (D) implementation of MAP agreements.

The "Assessment Methodology" provides procedures for undertaking peer review and monitoring in two stages. In Stage 1, a review is conducted of a how a member implements the minimum standard based on its legal framework for MAP and how the member applies the framework in practice. In Stage 2, a review is conducted of the measures the member takes to address any shortcomings identified in the Stage 1 peer review.

The "MAP statistics reporting framework" reflects the collaborative approach that competent authorities will take to resolve MAP cases and to ensure greater transparency on statistical information relating to the inventory, types, and outcome of MAP cases through common reporting of MAP cases going forward. The "MAP statistics reporting framework" is consistent with Action 14's minimum standards, which includes "a commitment to provide timely and complete reporting of MAP statistics pursuant to an agreed reporting framework."

The "Guidance on Specific Information and Documentation Required to be Submitted with a Request for MAP Assistance," allows members to draft their own MAP guidance and to provide guidance to taxpayers in their preparation of a MAP submission. This document requires members publish MAP guidance identifying the specific information and documentation that a taxpayer is required to submit with a request for MAP assistance.

The Forum on Tax Administrations' MAP Forum will conduct the peer review and monitoring process, with all members participating on an equal footing. Furthermore, the methodology released contains the possibility for developing countries to defer the peer review, recognizing their capacity constraints and often relatively small MAP pipeline. The actual peer reviews will be conducted in batches, with the first batch commencing in December 2016.


In a post-BEPS world, where multinational enterprises (MNEs) face tremendous pressures and scrutiny from tax authorities, the release of the Peer Review Documents represent a recognition and importance of the need to achieve tax certainty to cross border transactions for MNEs. While increased scrutiny is expected to significantly increase the risk of double taxation, the fact that tax authorities may be subject to review by their peers should be seen by MNEs as a positive direction to ensure access to an effective mutual agreement process. However, we are at a very early stage on the adoption of the BEPS action items and it is difficult to predict at this point what will be the impact of the peer review process on the future behavior of tax authorities. Prior experience from the Exchange of Information Peer Review process suggests that peer reviews can have some positive effects regarding effective access to the MAP process for MNEs.

For additional information with respect to this Alert, please contact the following:

  • Thomas Vidan
  • Frank Ng
  • Richard McAlonan
  • David Canale
  • Carlos Mallo

For a full listing of contacts and email addresses, please click on the Tax News Update: Global Edition (GTNU) version of this Alert.