- In the report released in July 2013, the OECD announced the need to develop solutions for obstacles that prevent countries from resolving treatyrelated disputes under mutual agreement procedure (MAP), including the absence of arbitration provisions in most treaties and the fact that access to MAP and arbitration may be denied in certain cases.
- In the report released in October 2015, the OECD introduces a minimum standard with respect to the resolution of treaty-related disputes. The BEPS committed countries agreed to a rapid implementation and agreed to ensure its implementation through peer-based monitoring.
- The minimum standard will ensure:
– That treaty obligations related to MAP are fully implemented and MAP cases are resolved in a timely matter;
– The implementation of administrative processes that promote the prevention and timely resolution of treaty-related disputes;
– That taxpayers can access the MAP when eligible.
- Additionally 20 countries, including the Netherlands, have committed to provide for mandatory binding MAP arbitration in their bilateral tax treaties to guarantee a timely resolution of treaty-related disputes.
Impact of Action 14 for the Netherlands
The Netherlands supports Action 14. The final report is a major step towards an improvement of dispute resolution. Since the report calls for a miminum standard we hope that the recommendations on Action 14 in practice indeed will materialize and lead to a better safeguard and improvement of the position of taxpayers. However we do regret that countries such as Brazil, China, India and Russia have not committed to the arbitration clause.