December 2, 2022
OECD's 2021 mutual agreement procedure statistics show US continues to decrease case inventory
Newly-released statistics from the OECD on MAP show that the US MAP program's inventory decreased in 2021. In addition, the US MAP program closed more cases (that were started on or after January 1, 2016) than it opened in 2021.
The 2021 statistics were released on November 22, 2022, at the OECD's fourth Tax Certainty Day.1 During the event, the OECD also released the 2021 MAP awards.
Along with the US statistics, the 2021 statistics include information from other members of the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting (Inclusive Framework) that joined the Inclusive Framework before 2022 and submitted their MAP statistics. The 2021 data covers almost all MAP cases worldwide. Separate statistics are provided for transfer pricing cases and "other" cases (i.e., non-transfer pricing cases) for 2021 on the:
The 2021 MAP statistics also include the number of MAP cases that each jurisdiction has with each of its treaty partners. Moreover, each reporting jurisdiction's performance against key indicators for each type of case can be compared through an interactive tool.
At the event, the OECD announced the 2021 MAP awards recognizing the particular efforts of competent authorities across a range of metrics. For 2021, the new category of "most improved jurisdiction" was introduced to recognize the jurisdiction that had the greatest increase in cases closed with unilateral relief or full agreement.
2021 MAP statistics
The MAP statistics distinguish between transfer pricing and "other" cases. A transfer pricing MAP case relates to either attributing profits to a permanent establishment or determining profits between associated enterprises. Any MAP case that is not a transfer pricing MAP case is considered an "other" MAP case. In the MAP statistics reporting framework, cases received before January 1, 2016, are distinguished from cases received on or after that date. For the jurisdictions that joined the Inclusive Framework after December 31, 2016, the MAP statistics distinguish between cases received before January 1st of the year the jurisdiction joined the Inclusive Framework and cases received on or after that date.
The OECD has updated the interactive tool that allows users to compare the covered jurisdictions' performance in 2021 for both types of cases. The comparison is based on seven key indicators:
Users may customize their search by filtering among the indicators and selecting groups of jurisdictions.
The US MAP Program2
The US MAP program's inventory decreased in 2021. Over half of the cases started before January 1, 2016, were closed in 2021: out of 243 open cases, 84 transfer pricing cases and 50 other cases were closed, leaving only 109 cases still open. The US MAP program also closed more cases started on or after January 1, 2016, than it opened in 2021. In particular, 224 transfer pricing cases and 132 other cases were closed, while 130 transfer pricing cases and 124 other cases were opened in 2021.
The US MAP program's inventory decreased by 25%, from 927 open cases at the beginning of 2021 to 691 open cases at the end of 2021. For cases opened on or after January 1, 2016, transfer pricing cases were closed in an average of 29.4 months, while other cases took an average of 20.2 months from start to end. Eighty-eight percent of transfer pricing cases and 81% of other cases were resolved through the MAP program.
Of the post-2015 transfer pricing cases open at the beginning of 2021, over 200 were between the US and India. Canada, Germany, the United Kingdom and India each had at least 40 open post-2015 other cases with the US at the beginning of 2021.
MAP statistics for all countries
2021 MAP awards
The OECD recognized the efforts of the following competent authorities:
The MAP statistics demonstrate that the MAP found in most double tax treaties remains an effective way to eliminate double taxation and taxation not in accordance with a treaty. That said, processing times are still well above many tax authorities' 24-month completion goal. For example, the US MAP program takes 29 months, on average, to resolve its transfer pricing cases. MAP processing times in some jurisdictions have been significantly improved by the use of mandatory binding arbitration, which can be an effective tool to help improve case-processing times. The 2021 OECD MAP statistics show that MAP remains an effective dispute resolution tool that taxpayers should consider using to resolve tax disputes.
Published by NTD’s Tax Technical Knowledge Services group; Maureen Sanelli, legal editor
1 The replay is available here.
2 All information was taken from statistics released by the OECD, which are available here.