E Pluribus Unum - Out of Many, One

In September 2019, the OECD published POP statistics for 2018. Note: in this overview, the authors give an overview of the main statistics, followed by some takeaways for companies, on the evolution of the map process (for the better) and how to better use it in the future. In practice, relatively few cases have been referred to arbitration. Figures published in July 2019 by the European Union`s Joint Forum on Transfer Prices, which show that statistics on kremate pending under the arbitration agreement at the end of 2018 show that there have been 932 live cases in the Member States; However, only two live cases were being adjudicated. The OECD publishes statistics on the mutual agreement procedure in 2018 It is interesting to note that, on average, countries have closed more cases than they started in 2018. Tax authorities in many countries have tried to improve understanding of how POPs work by providing detailed instructions on procedures, and many have increased their resources to deal with map files. We welcomed the OECD initiative to award awards for best performance in the processing and resolution of map files, and to facilitate meetings between relevant authorities at OECD events. In light of these developments, it is more important than ever that taxpayers and their advisors “deviate” from the historical reservations of the POPs process and take objectively and well-informed account of the use of POPs. Of the 2,704 cases resolved in 2018, 59% resulted in an agreement that did not replace, in whole or in part, double taxation, in accordance with the tax treaty. 17% of cases were resolved unilaterally by a contractor and 4% were resolved on the basis of national remedial measures.

Only 2% of the cases were concluded without agreement, including an agreement that did not agree. The remaining 18% were: cases withdrawn by the taxpayer (6%); if an objection was found to be unjustified or accepted that there was no tax that did not comply with the tax treaty (5%); where access to POPs was denied (6%); and all other results (1%). Statistics for 2018 provide an interesting insight into how the POP works and how tax authorities are taking steps to make the process more transparent and efficient. In total, statistics show that more than 2,000 POPs were launched in 2018, slightly more than the closures. Pop statistics 2019 are also available by reporting country. According to the OECD, 81% of POP cases closed in 2018 have solved the problem. Of these 81%, 57% of the closed POP cases were closed by an agreement to completely eliminate double taxation, 17% eliminated double taxation by unilateral relief from a competent authority, 4% were resolved by national remedies and 2% were resolved by an agreement that partially eliminated double taxation.

 

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