Latest OECD publications on the outcomes of the implementation of BEPS Action 13 and Action 14

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Under the Base Erosion and Profit Shifting (BEPS) package, jurisdictions around the world have committed to implementing minimum standards to enhance transparency over multinational enterprises' (MNEs) global operations and improve the resolution of tax-related disputes between countries. 

The OECD has recently released its seventh annual peer review report on BEPS Action 13 regarding Country-by-Country (CbC) Reporting, alongside the latest updates on BEPS Action 14 concerning the Mutual Agreement Procedure (MAP). These updates highlight significant progress and ongoing efforts to bolster international tax governance.

BEPS ACTION 13: COUNTRY-BY-COUNTRY REPORTING

The seventh annual peer review of BEPS Action 13 assesses the implementation of CbC Reporting standards by jurisdictions as of April 2024. Key highlights from the review include:

• Legislation and Coverage:

• Over 115 jurisdictions have enacted legislation mandating CbC Reporting for MNE groups with consolidated revenues at or above EUR 750 million.

• Remaining Inclusive Framework members are in the process of finalizing their domestic legal frameworks with OECD support.

• Implementation Consistency:

• Where legislation is in place, the implementation of CbC Reporting largely aligns with the minimum standards set out in Action 13.

• Exchange of Reports:

• More than 3,300 bilateral relationships are established for the exchange of CbC reports, facilitating cross-border transparency.

• Next Steps:

• The BEPS Action 13 peer review is conducted annually, with the next report expected in the third quarter of 2025.

BEPS ACTION 14: MUTUAL AGREEMENT PROCEDURE

BEPS Action 14 focuses on improving the efficiency and timeliness of resolving disputes arising from double taxation. The latest updates reflect progress in the implementation of the new Assessment Methodology introduced in December 2022:

• New Assessment Methodology:

• The methodology includes a simplified peer review process for jurisdictions with limited MAP experience and a comprehensive review for those with substantial MAP experience.

• Simplified Peer Review Results:

• The latest batch of simplified peer review reports covers 20 jurisdictions (Stage 1 Batches 1 & 2), including Albania, Antigua and Barbuda, Belize, Botswana, Colombia, Cook Islands, Costa Rica, Dominican Republic, Egypt, Jamaica, Jordan, Lithuania, Mauritius, Nigeria, North Macedonia, Pakistan, Serbia, Seychelles, Sri Lanka, and Zambia.

• Progress and Achievements:

• Many jurisdictions, including Albania, Costa Rica, Colombia, and Nigeria, have signed or ratified the Multilateral Instrument, aligning a substantial number of their treaties with Action 14 standards.

• Jurisdictions such as Albania, Costa Rica, and Colombia have documented bilateral notification and consultation processes for cases of disputed objections.

• Countries like Costa Rica and Nigeria have either resolved their MAP cases within the average time of 24 months or maintain adequately resourced competent authorities.

• Several jurisdictions, including Colombia, Costa Rica, and Sri Lanka, have issued or updated their MAP guidance to ensure effective dispute resolution.

• Future Outlook:

• The simplified peer review aims to help jurisdictions with limited MAP experience develop more robust programmes, enhancing their ability to manage future disputes effectively.

The recent updates from BEPS Actions 13 and 14 demonstrate a concerted global effort to enhance tax transparency and improve the resolution of international tax disputes. The progress made reflects a strong commitment to ensuring that multinational enterprises operate within a clear and fair tax framework, contributing to a more transparent and equitable global tax system.

Reports can be accessed via below link.

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• OECD/G20 Inclusive Framework on BEPS shows progress in making dispute resolution more effective and in improving tax transparency through Country-by-Country reporting