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May 13, 2021

OECD releases Ireland Stage 2 peer review report on implementation of Action 14 minimum standard

Executive summary

On 15 April 2021, the Organisation for Economic Co-operation and Development (OECD) released the Stage 2 peer review report of Ireland relating to the outcome of the peer monitoring of the implementation of the Base Erosion and Profit Shifting (BEPS) minimum standard under Action 14 on improving tax dispute resolution mechanisms. Stage 2 focuses on monitoring the follow-up of any recommendations resulting from Ireland’s Stage 1 peer review report.

Overall the report concludes that Ireland meets almost all of the elements of the Action 14 minimum standard and has worked to address the shortcomings identified in its Stage 1 peer review report. The key shortcomings still to be addressed relate to consistency with the OECD Model Tax Convention:

  • Almost 40% of Ireland’s tax treaties do not state that the competent authorities may consult together for the elimination of double taxation for cases not provided for in the tax treaty.
  • Almost 30% of Ireland’s tax treaties neither contain a provision stating that mutual agreements shall be implemented notwithstanding any time limits in domestic law, nor to set a time limit for making transfer pricing adjustments.

Ireland signed and ratified the Multilateral Instrument (MLI). Ireland has committed that it intends to update all of its tax treaties to be compliant with the requirements under the Action 14 minimum standard via bilateral negotiations, where such treaties will not be modified upon entry into force of the MLI.

Detailed discussion


In October 2016, the OECD released the peer review documents (i.e., the Terms of Reference and Assessment Methodology) on Action 14 which form the basis of the Mutual Agreement Procedure (MAP) peer review and monitoring process under BEPS Action 14.1

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: (i) preventing disputes; (ii) availability and access to MAP; (iii) resolution of MAP cases; and (iv) implementation of MAP agreements.

The Assessment Methodology establishes detailed procedures and guidelines for a two-stage approach to the peer review and monitoring process. Stage 1 involves the review of a Member’s implementation of the minimum standard based on its legal framework for MAP and the application of this framework in practice. Stage 2 involves the review of the measures taken by the Member to address any shortcomings identified in its Stage 1 peer review. In light of the above, the OECD has also released a schedule for Stage 1 of the peer review and a questionnaire for taxpayers. The schedule catalogues the assessed jurisdictions into 10 batches for review.

Both of these stages are desk-based and are coordinated by the Secretariat of the Forum on Tax Administration’s (FTA) MAP Forum.2 In summary, Stage 1 consist of three steps or phases:

  • Obtaining inputs for the Stage 1 peer review
  • Drafting and approval of a Stage 1 peer review report
  • Publication of Stage 1 peer review reports

Input is provided through questionnaires completed by the assessed jurisdiction, peers (i.e., other members of the FTA MAP Forum) and taxpayers. Once the input has been gathered, the Secretariat prepares a draft Stage 1 peer review report of the assessed jurisdiction and sends it to the assessed jurisdiction for its written comments on the draft report. When a peer review report is finalized, it is sent for approval of the FTA MAP Forum and later to the OECD Committee on Fiscal Affairs (CFA) to adopt the report for publication.

For Stage 2, there are two steps or phases: (i) approval of Stage 2 peer monitoring report of an assessed jurisdiction and (ii) publication of Stage 2 peer review reports. More specifically, an assessed jurisdiction should within one year of the adoption of its Stage 1 peer review report by the CFA submit a detailed written report (Update Report) to the FTA MAP Forum. The Update Report should contain: (i) the steps that the assessed jurisdiction has taken or is taking to address any shortcomings identified in its peer review report; and (ii) any plans or changes to its legislative or procedural framework relating to the implementation of the minimum standard. Members of the FTA MAP Forum should also provide their comments on the Update Report provided by the assessed jurisdiction. Based on the Update Report submitted by the assessed jurisdiction and the input from the peers, the Secretariat will revise the Stage 1 peer review report of the assessed jurisdiction with a view to incorporate these updates in the Stage 2 peer monitoring report of the assessed jurisdiction. After adoption from the CFA, the Stage 2 peer monitoring report will be published.

Minimum standard peer review reports

The report is divided into four parts, namely:

  • Preventing disputes
  • Availability and access to MAP
  • Resolution of MAP cases
  • Implementation of MAP agreements

Each part addresses a different component of the minimum standard.

Preventing disputes

Ireland meets the Action 14 minimum standard concerning the prevention of disputes. It has in place a bilateral Advance Pricing Agreement (APA) program, which enables taxpayers to request rollbacks of bilateral APAs and such requests have been accepted in practice.

Availability and access to MAP

Ireland also meets the requirements regarding the availability and access to MAP under the Action 14 minimum standard. It provides access to MAP in all eligible cases. Furthermore, it has in place a documented bilateral notification process for those situations in which its competent authority considers the objection raised by taxpayers in a MAP request as not being justified.

Ireland also has clear and comprehensive guidance on the availability of MAP and how it applies this procedure in practice. Ireland has a dispute settlement/resolution process which is independent from the audit and examination function and which can only be accessed through a request by the taxpayer.

In respect of the average time needed to close MAP cases, the MAP statistics for Ireland for the period 2016-18 outline an average time to close attribution/allocation cases of 38.29 months, while the average time to close all other cases is 24.27 months. The total average timeframe to close all MAP cases is therefore 32.86 months. This is above the 24 months pursued average timeframe for resolving MAP cases received on/after 1 January 2016. During 2016-18, Ireland closed 58% of all MAP cases started in those years, but Ireland’s MAP inventory as on 31 December 2018 increased by 61% compared to 1 January 2016. Although Ireland has taken several steps to resolve cases in a timely manner, such as increasing resources and training/knowledge sharing, further actions or additional resources are necessary to ensure that MAP cases are resolved in a timely, efficient and effective manner.

Resolution of MAP cases

Ireland meets all the other requirements under the Action 14 minimum standard in relation to the resolution of MAP cases. Ireland’s competent authority operates fully independently from the audit function of the tax authorities and adopts a pragmatic and principled approach to resolve MAP cases in an effective and efficient manner. Its organization is adequate and the performance indicators used are appropriate to perform the MAP function.

Implementation of MAP agreements

Ireland also meets the requirements under the Action 14 minimum standard with respect to the implementation of MAP agreements. Ireland monitors the implementation of MAP agreements and no issues have surfaced regarding the implementation throughout the peer review process


In a post-BEPS world, where multinational enterprises (MNEs) face tremendous pressures and scrutiny from tax authorities, the release of Ireland’s Stage 2 peer review report represents the continued recognition and importance of the need to achieve tax certainty for 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 step to best ensure access to an effective and timely mutual agreement process.


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

Ernst & Young (Ireland), Dublin



  1. See EY Global Tax Alert, OECD releases BEPS Action 14 on More Effective Dispute Resolution Mechanisms, Peer Review, dated 31 October 2016.