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Under Action 14, countries have committed to implement a minimum standard to strengthen the effectiveness and efficiency of the mutual agreement procedure (MAP). The MAP is included in Article 25 of the OECD Model Tax Convention and commits countries to endeavour to resolve disputes related to the interpretation and application of tax treaties. The Action 14 Minimum Standard has been translated into specific terms of reference and a methodology for the peer review and monitoring process. The minimum standard is complemented by a set of best practices.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 jurisdictions' stage 1 peer review report. This report reflects the outcome of the stage 1 peer review of the implementation of the Action 14 Minimum Standard by Japan, which is accompanied by a document addressing the implementation of best practices which can be accessed on the OECD website: http://oe.cd/bepsaction14.

Japan’s education system is one of the top performers compared to other OECD countries. International assessments have not only demonstrated students' and adults' high level of achievement, but also the fact that socio-economic status has little bearing on academic results. In a nutshell, Japan combines excellence with equity.

This high performance is based on the priority Japan places on education and on its holistic model of education, which is delivered by highly qualified teachers and supported by the external collaboration of communities and parents. But significant economic, socio-demographic and educational challenges, such as child well-being, teacher workload and the high stakes university exam, question the sustainability of this successful model.

Policy makers in Japan are not complacent, and as Japan starts implementing its Third Basic Plan for the Promotion of Education (2018-22), they are carefully analysing tomorrow’s threats to Japan’s current success.

This report aims to highlight the many strengths of Japan’s education system, as well as the challenges it must address to carry out reforms effectively and preserve its holistic model of education. The ultimate goal is to ensure that the education system delivers the best for all students, and that Japanese learners have the knowledge, skills, attitudes and values they need for the 21st century.

This report contains the 2018 Peer Review Report on the Exchange of Information on Request of Japan.