Mutual agreement procedure (MAP) pursuant to article 25 of the OECD and UN Model treaties imposes obligations on tax administrations. Inadequacies in the performance of these obligations has been the subject of much work by the OECD in the course of the 21st Century. BEPS Action 14 OECD Action 14 – 2015 Final Report, Making…

Corresponding adjustments and the MAP process When the price charged for goods or services sold between related parties is not in accordance with the arm’s length principle, Article 9(1) of the OECD Model authorizes the tax authorities of a State to make primary adjustments to the transfer price. This may trigger economic double taxation as…

Transfer pricing cases in India are estimated to account for more than half of the world’s transfer pricing disputes. Prolonged transfer pricing litigation due to overburdened courts and tribunals is a sad reality for many companies doing business in India. The consequence is that a cloud of uncertainty constantly hangs over cross-border, intra-group transactions routinely…

On 30 August 2018 the OECD released the fourth round of BEPS Action 14 peer review reports on improving tax dispute resolution mechanisms. Included in this round was a report on Australia. The report concluded that Australia meets part of the elements of the Action 14, and in particular meets some of the requirements regarding…

A Directive on Tax Dispute Resolution was adopted by European Member States early in October 2017. It had been proposed by the European Commission 1 year ago as part of the Corporate Tax Reform Package, along with the Common Consolidated Corporate Tax Base (CCCTB) and the amendment of the Anti-Tax Avoidance Directive (ATAD) regarding hybrid…

Adoption of the EU Council Directive on Tax Dispute Resolution Mechanisms in the European Union on 10 October 2017 is a milestone in international tax dispute resolution. The Directive offers a uniform mechanism to address tax treaty disputes among EU member states that meets the BEPS Action 14 minimum standard, and largely renders the arbitration…

IRS Operational Update: Reorganization and Risk-Based Approach The IRS new Large Business and International (LB&I) risk approach has been implemented in the form of “campaigns”, focusing on weighing the size of the compliance risk, how often the risk is occurring, where it is occurring and if the risk is a result of a promoted scheme….

As widely reported, the signing ceremony of the Multilateral Convention to implement tax treaty related measures to prevent Base Erosion and Profit Shifting (“MLI”) took place on 7 June 2017, in Paris, with the participation of Ministers and other high-level political representatives from various countries around the world. Besides the United States, which from the…

On June 7, 2017, India joined more than 65 countries in signing the OECD’s Multilateral Instrument to implement tax treaty-related base erosion and profit shifting (BEPS) recommendations. The Instrument – developed under Action 15 of the BEPS project – seeks to transpose BEPS recommendations into over a thousand tax treaties in a “synchronized and efficient…

There is no doubt that 7 June 2017 is a day that will be a milestone in the history of international tax law. Signature of the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (“MLI”) at a high-profile ceremony at the OECD in Paris by 68 ministers and…

A world of tax without disputes is an illusion. It is just as much an illusion as a world without tax. Tax and disputes come together inseparably. Disputes is not something to be ashamed of – I say this in particular to authorities. Nor – and it this meant more for taxpayers –  to be…

If there was ever a need to demonstrate the need to improve international tax dispute resolution mechanisms, it was as a speaker at the TP Minds conference earlier this month. In the course of our panel discussion on dispute resolution post BEPS, I asked the audience of over 100 tax directors and managers of multinational…

“A camel is an animal designed by a committee” – Anonymous In launching the BEPS programme in 2013, the OECD warned that replacement of the current consensus-based framework by unilateral measures, could lead to global tax chaos marked by the massive re-emergence of double taxation (OECD: Action Plan on Base Erosion and Profit Shifting (2013))….

Publication of text of The Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (BEPS Convention) by the OECD on 24 November 2016 is one of the key milestones in the OECD/G20 Project to tackle Base Erosion and Profit Shifting. The BEPS Convention will be open for signature from…