September 28 2022

United Arab Emirates Makes Progress on MAP Dispute Resolution Mechanism, OECD Report Says

Source: IBFD Tax Research Platform News

On 13 September 2022, the Organisation for Economic Co-operation and Development (OECD) praised United Arab Emirates (UAE) for making progress on its dispute resolution mechanism regarding the Mutual Agreement Procedure (MAP). UAE meets the requirements regarding the availability and access to MAP under the BEPS Action 14 Minimum Standard, according to a new OECD peer review report.

The peer review process is conducted in two stages. Stage 1 assesses countries against the terms of reference of the minimum standard according to an agreed schedule of review. Stage 2 focuses on monitoring the follow-up of any recommendations resulting from a jurisdiction's Stage 1 peer review report. This report reflects the outcome of the Stage 2 peer monitoring of the implementation of the BEPS Action 14 Minimum Standard by UAE.

The report Making Dispute Resolution More Effective – MAP Peer Review Report, UAE (Stage 2), released by the OECD's Centre of Tax Policy Administration under the auspices of the Forum on Tax Administration (FTA)'s Mutual Agreement Procedure Forum of the Committee of Fiscal Affairs, said that UAE overall meets most of the elements of the BEPS Action 14 Minimum Standard. "UAE worked to address most of the deficiencies highlighted in the stage 1 report," the report said. "In this respect, UAE solved most of the identified deficiencies."

From 2018 to 2020, MAP cases were on average closed within a timeframe of 24 months. The average time to close those cases was 15.10 months. However, there was an increase of four MAP cases during this period. However, to be fully compliant with all four areas of an effective dispute resolution mechanism under BEPS Action 14 minimum standard, UAE signed and ratified the Multilateral Instrument.

The report also highlighted that UAE meets the Action 14 Minimum Standard as regards the implementation of MAP agreements.

Under BEPS Action 14, members of the OECD/G20 Inclusive Framework on BEPS have committed to implementing a minimum standard to strengthen the effectiveness and efficiency of MAP. The MAP is included in article 25 of the OECD Model Tax Convention and commits countries to try to resolve disputes related to the interpretation and application of tax treaties.