OECD releases 2020 peer review report on BEPS Action 5 on the Exchange of Information of Tax Rulings

Local contact

EY Global

Executive summary

On 14 December 2021, the Organisation for Economic Co-operation and Development (OECD) released the fifth annual peer review report (the report) relating to compliance by members of the Inclusive Framework on Base Erosion and Profit Shifting (BEPS) with the minimum standard on BEPS Action 5 for the compulsory spontaneous exchange of certain tax rulings (the transparency framework).

The report covers 131 of the 141 current Inclusive Framework jurisdictions (pdf), including all jurisdictions that joined prior to 30 June 2020, and Jurisdictions of Relevance (i.e., jurisdictions that are outside the Inclusive Framework but are deemed to be of interest for the purposes of transparency in tax) identified prior to 30 June 2020. The report assesses the 2020 calendar-year period and contains 66 recommendations for 36 jurisdictions to improve their legal or operational framework to identify and exchange tax rulings. Further, the report indicates that as of 31 December 2020, almost 22,000 tax rulings within the scope of the transparency framework had been issued by the jurisdictions under review, and over 41,000 exchanges of information had taken place.

This report is the first report for the peer review process on BEPS Action 5 conducted under the new transparency framework for the years 2021 through 2025 that was published on 22 February 2021.1

Detailed discussion


In October 2015, the OECD released the final reports on all 15 focus areas of the BEPS Action Plan.2 The recommendations made in the reports range from new minimum standards to reinforced international standards, common approaches to facilitate the convergence of national practices and guidance on best practices. Minimum standards are the BEPS recommendations that all members of the Inclusive Framework have committed to implement, covering some of the elements of:

  • Action 5 on harmful tax practices

  • Action 6 on treaty abuse

  • Action 13 on transfer pricing documentation and country-by-country reporting

  • Action 14 on dispute resolution

The minimum standards are all subject to peer review processes. The mechanics of the peer review process were not included as part of the final reports on these Actions. Instead, the OECD indicated at the time of the release of the BEPS reports that it would, at a later stage, issue peer review documents on these Actions providing the terms of reference and the methodology by which the peer reviews would be conducted.

In February 2017, the OECD released the peer review documents (i.e., the Terms of Reference and Assessment Methodology) for BEPS Action 5 on the compulsory spontaneous exchange of certain types of tax rulings to address the transparency framework related to harmful tax practices.The Terms of Reference translated the Action 5 minimum standard for the transparency framework into four key areas of review:

(i) The information-gathering process

(ii) The exchange of information

(iii) Confidentiality of the information received

(iv) Statistics

Each peer review is focused on whether the assessed jurisdictions comply with the minimum standard in all four key areas, based on each jurisdiction’s legal framework and on how it applies the framework in practice.

The Assessment Methodology set out procedures for peer review and monitoring from 2017 through 2020.

On 17 February 2021, the OECD Inclusive Framework on BEPS approved the new transparency framework for the coming years.In the new review process, the terms of reference remain the same as in the initial transparency framework, while the methodology is slightly updated, setting out the procedural mechanics by which jurisdictions will complete the peer with respect to 2020 and onwards.

To date, the OECD has released five annual peer review reports. The first four reports relate to the original transparency framework, while this fifth report is based on the updated peer review process:

  • On 4 December 2017, the OECD released the first annual peer review report, which covered the assessment of 44 jurisdictions (i.e., OECD and G20 countries and countries that were in the OECD accession process during the BEPS project) for the 2016 calendar-year period. The report included 49 country-specific recommendations for improvement.5
  • On 13 December 2018, the OECD released the second annual peer review report, which covered the assessment of 92 jurisdictions for the 2017 calendar-year period. The report included 60 country-specific recommendations for improvement.6
  • On 23 December 2019, the OECD released the third annual peer review report, which covered the assessment of 112 jurisdictions for the 2018 calendar-year period. The report included 52 country-specific recommendations for improvement.7
  • On 15 December 2020, the OECD released the fourth annual peer review report, which covered the assessment of 124 jurisdictions for the 2019 calendar-year period. The report included 58 country-specific recommendations for improvement.8
  • On 14 December 2021, the OECD released this fifth annual peer review report, which covers the assessment of 131 jurisdictions for the 2020 calendar-year period. The report includes 66 country-specific recommendations for improvement.
Annual peer review on the exchange of information on tax rulings

BEPS Action 5 on the compulsory spontaneous exchange of information on tax rulings is intended to provide tax administrations with timely information on rulings that have been granted to a foreign-related party of their resident taxpayer or a permanent establishment, which can be used in conducting risk assessments and which, in the absence of exchange, could give rise to BEPS concerns.

The exchange of information on tax rulings covers five categories:

(i) Rulings related to certain preferential regimes

(ii) Unilateral advance pricing arrangements (APAs) or other cross-border unilateral rulings in respect of transfer pricing

(iii) Rulings providing for a downward adjustment of taxable profits

(iv) Permanent establishment (PE) rulings

(v) Related party conduit rulings

The fifth annual peer review covers 131 jurisdictions, including all Inclusive Framework members that joined prior to 30 June 2020 and Jurisdictions of Relevance identified by the Inclusive Framework prior to 30 June 2020. Of these 131 jurisdictions, there were 31 jurisdictions9 that are not able to legally, or in practice, issue rulings in the scope of the transparency framework and no separate peer review reports are included for these jurisdictions. Eight other members10 of the Inclusive Framework have not been assessed under the transparency framework as these jurisdictions do not impose any corporate income tax and cannot legally issue rulings within the scope of the transparency framework.

One of the terms of reference is related to confidentiality. The reviews of confidentiality in connection with the transparency framework refer to the work of the Global Forum on Transparency and Exchange of Information for Tax Purposes in connection with the standard on Automatic Exchange of Financial Account Information for Tax Purposes. The outcomes of that work are not published, and no further references to the review of confidentiality are made in the peer review document. Therefore, each country assessment included in the second chapter of the report covers the following elements, namely:

(i) The information-gathering process

(ii) Exchange of information

(iii) Statistics

(iv) Exchange of information on intellectual property regimes

The country assessments indicate whether the relevant country has met the requirements set out in the terms of reference for the year in review and thus whether the country issues tax rulings within the scope of BEPS Action 5. As noted in the OECD’s press release, 95 jurisdictions are now fully in line with the transparency element of the minimum standard for Action 5, with the remaining 36 jurisdictions receiving one or more recommendations to improve their legal or operational framework to identify and exchange tax rulings. The most common recommendations are on issues such as:

(i) Ensuring that all information on past and future rulings is exchanged as soon as possible.

(ii) Ensuring that the information gathering process for identifying all past and future rulings and potential exchange jurisdictions, including a review and supervision mechanism, is either introduced, finalized or strengthened.

(iii) Ensuring that the templates for all relevant rulings are completed and in accordance with the form agreed under the transparency framework.

(iv) Ensuring that a domestic legal framework is in place allowing spontaneous exchange of information on the relevant tax rulings.

The jurisdiction assessments also contain information on the number of past rulings and future rulings issued by a country for the assessed period, as well as the number of follow-up requests that countries received for the exchange of the ruling and the average time to provide the response.

Overall, almost 22,000 tax rulings within the scope of the transparency framework have been issued by the jurisdictions being reviewed. As of 31 December 2020, over 41,000 exchanges of information had taken place, with approximately 5,000 exchanges during 2020, 7,000 during 2019, 9,000 during 2018, 14,000 during 2017, and 6,000 during 2016.

Next steps

The jurisdictions assessed in the 2020 annual peer review report are now working to address deficiencies identified in their respective reports. The Inclusive Framework is continuing to focus on maintaining the progress made on ensuring transparency with respect to tax rulings into the future through a review of the overall effectiveness of Action 5.


The annual peer review report is a significant step in the OECD’s efforts for more transparency and information exchange in the area of tax. Member countries not only have to adapt their laws to be able to implement the transparency framework but also have to adapt their tax administration systems to be able to process and report on information exchange. The report further reinforces the current transparency environment, where exchanging information automatically is the new standard. This evolution, coupled with an ever-increasing amount of information being exchanged (such as tax rulings, financial account information, and country-by-country reports), reinforces the importance for businesses of ensuring that information filed is submitted in such a way that it cannot be read out of context in order to reduce any possible confusion.

While there are no signs that the Inclusive Framework intends to modify the Action 5 transparency standard, the European Commission intends to propose changes to the transparency framework in the European Union. According to a recently published Council report (pdf), in 2022 the Commission will table a legislative proposal on further revision of the Directive on administrative cooperation in the field of taxation (DAC), including proposals to cover tax rulings for wealthy individuals.


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

Ernst & Young Belastingadviseurs LLP, Rotterdam
  • Ronald van den Brekel
  • Marlies de Ruiter
  • Maikel Evers
  • Andromachi Anastasiou
Ernst & Young Belastingadviseurs LLP, Amsterdam
  • David Corredor-Velásquez

  • Konstantina Tsilimigka

  • Roberto Aviles Gutierrez

Ernst & Young LLP (United States), Global Tax Desk Network, New York
  • Jose A. (Jano) Bustos
Ernst & Young LLP (United States), Washington, DC
  • Barbara M. Angus

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