On November 15, 2024, the Organization for Economic Cooperation and Development (OECD) released 2023 statistics on Mutual Agreement Procedures (MAPs) and Advance Transfer Pricing Agreements (APAs). This was released during the sixth OECD Tax Security Day in Athens, Greece.
Trends Prominent in the 2023 Statistics
The 2023 statistics reveal several significant trends:
- Reduction of pending cases: The MAP case inventory decreased by 3.8% at year-end for the first time.
- Change in new cases: MAP cases related to Transfer Pricing decreased by 16%, while other cases increased slightly by 2.8%.
- Increase in closed cases: The case resolution recorded a rise of 7.4% in Transfer Pricing and 15.8% in other cases.
- Average resolution time: The average time to resolve MAP cases was 27.3 months, 32 for Transfer Pricing, and 23.4 for other cases.
- Successful outcomes: Approximately 74% of MAP cases concluded with a full resolution, maintaining the 2022 trend.
Introduction of APA Statistics
For the first time, 46 jurisdictions with bilateral APA programs provided statistics, indicating over 4,000 cases in inventory, an average closure rate of 25%, and an average time to signature of an APA of 36.8 months.
Awards for Outstanding Performance
The OECD awarded the competent authorities that demonstrated outstanding performance:
- The shortest time to resolve cases is in the Netherlands and Australia in Transfer Pricing and other cases, respectively.
- The best management of old cases is in Canada, with the lowest proportion of pre-2016 cases in its final inventory.
- More effective workload management: The Netherlands and Norway.
- The effective cooperation among jurisdictions is in Canada and France in Transfer Pricing cases and Austria and Switzerland in other cases.
- The most improved jurisdiction is France, which closed 212 additional cases with positive results compared to 2022.
- The focus on dispute avoidance is in Japan, with 84.7% of its Transfer Pricing workload made up of APAs.
Importance for Multinational Enterprises
These statistics demonstrate the commitment of the OECD and participating jurisdictions to improve the efficiency and effectiveness of tax dispute resolution mechanisms. Multinational companies must understand these trends to manage tax risks and ensure compliance with international regulations.
Conclusion
The publication of these OECD statistics outlines significant progress in solving tax disputes and implementing APAs. Companies should keep abreast of these advances to optimize their tax strategies and ensure regulatory compliance.
Source: OECD
