From the report “Improving the Resolution of Tax Treaty Disputes” adopted by the Committee on Fiscal Affairs on 30 January 2007.

 

"Adhering to these definitions will improve the accuracy and consistency of the data reported. In the exceptional case where a tax administration does not accept a definition or is unable to report based upon the definition, that administration is requested to provide a footnote explaining the difference between its reporting standard and the definition."

Average Cycle Time:

The average time to complete a MAP case. This average shall be calculated by first aggregating the number of months it took to complete or close each case (including any withdrawn case) that was completed, closed or withdrawn during the reporting period, from the date of initiation until the date of completion, closure or withdrawal. The second step is to divide this aggregated number of months by the total number of such completed, closed, and withdrawn cases. The result is the average cycle time of a MAP case in months, or in other words, the average number of months to complete a MAP case.

Closed or Withdrawn Case with Double Taxation:

This column should include information on any case that has been closed by a tax administration (where there is no further recourse within the MAP provision of the relevant convention) or withdrawn by a taxpayer under circumstances where the taxation not in accordance with the convention (including double taxation) has not been alleviated. The case is considered closed by the tax administrations on the date they have provided written notification to the taxpayer that they cannot and will not be able to reach a resolution and there is no further recourse (such as arbitration) available within MAP. Countries have the option to determine how they wish to report on such cases (e.g. the number of such cases or issues closed or withdrawn with double taxation, the monetary amounts of unrelieved double taxation in such cases, the percentage amounts of unrelieved double taxation in such cases, etc.), but they should report on a consistent basis from year to year and should explain the basis on which they are reporting.

Completed Case:

A case that has been resolved, whether by mutual agreement (including pursuant to arbitration) or by unilateral action on the part of the competent authority, where taxation not in accordance with a convention (including double taxation) has been alleviated in whole or in part. Generally, a case is completed on the date the taxpayer has officially accepted the resolution. At this point, the only remaining action by the tax administration should be the processing of the result of the resolution, which should be accomplished fairly promptly (e.g. within 30 days).

Ending Inventory:

The number of pending MAP cases in a competent authority’s inventory that are not completed, closed or withdrawn (as defined [above]) as of the end of a reporting period. The ending inventory will equal the opening inventory for the next year.

Initiated Case:

An “initiated” case is one that has been accepted by a competent authority. In most cases, competent authorities will accept a person’s request for competent authority assistance via MAP on the date the request is considered complete, and this is commonly evidenced by a notification from the competent authority to the person that the request has been accepted. A “complete request” is one where there is sufficient information included to allow the competent authority to decide whether the objection underlying the case appears to be justified. For this purpose, a merely “protective” competent authority filing (i.e. one which is made before the expiration of a time limit on making a competent authority request, but which does not contain enough information to allow the competent authority to decide whether the objection underlying the case appears to be justified) should not be considered an “initiated” case. A case which is presented to a competent authority by the competent authority of another State (pursuant to a request submitted to the latter competent authority) would typically be considered “initiated” for purposes of the former competent authority’s statistics when the former competent authority receives that presentation, unless the former competent authority promptly thereafter notifies the latter competent authority that the request is incomplete or is otherwise not accepted for MAP discussions. By definition this column will include only cases initiated during the current reporting period.

MAP Case:

A case arising from a request made by a person pursuant to the MAP provisions of a tax convention. Cases within a competent authority’s inventory would generally include both: (i) cases arising from a request submitted directly to that competent authority by the taxpayer; and (ii) cases arising from a request submitted by the taxpayer to the competent authority of the treaty partner and subsequently presented by the latter competent authority to the former competent authority. These cases are typically requests to resolve situations where taxpayers are subject to taxation not in accordance with the provisions of a relevant tax convention, predominantly situations of double taxation. It could be a case arising from a request submitted under a provision based upon Article 25(1) of the OECD Model Tax Convention, or alternatively under Article 25(3), provided that in the latter case the request is taxpayer-specific and not one for a generic interpretation of the treaty. It could also include a case in which a request is made for a determination of a taxpayer’s residence in dual resident situations of the type mentioned in Article 4(2)(d) of the OECD Model Tax Convention. A MAP case for this purpose is not considered to include a request for an Advance Pricing Arrangement (APA). Whilst a case may refer to a number of issues and taxation years, it should still be considered as only one case for statistical purposes as long as the issues are similar for all the years and are expected to be dealt with at the same time with a view to resolving all issues and years collectively. For that purpose, if, within three months from the reception of the first request, a competent authority receives a subsequent request by the same person with respect to a similar issue but for a different taxation year or with respect to the same taxation year for a different issue, that same request should be considered to be part of the first request.

Opening Inventory:

The number of pending MAP cases in a competent authority’s inventory that are not completed, closed, or withdrawn (as defined below) as of the beginning of a reporting period. The opening inventory will equal the ending inventory of the previous year. These pending cases include cases where a resolution has been reached but the taxpayer has yet to officially agree to the resolution. The opening inventory by definition will not include any cases initiated during the reporting period.

Reporting Period:

A reporting period is any 12-month period for which a competent authority prepares statistics relating to its Mutual Agreement Procedure (MAP) program. The reporting period for a specific calendar year is either that calendar year itself or any 12-month period ending during that calendar year, whichever best corresponds to the competent authority’s recordkeeping practice. Thus, for example, the 2006 reporting period would be calendar year 2006 for a competent authority that maintains records on a calendar year basis, or would be the period from 1 October 2005 to 30 September 2006 for a competent authority that maintains records on the basis of a year ending on 30 September. To achieve maximum consistency in the data, countries are strongly encouraged to report on a calendar year basis, but use of a non-calendar year reporting period is acceptable if a country finds calendar year reporting too burdensome.

Year Initiated:

The year (i.e. the 12-month reporting period) in which a case is initiated, as defined below. Each reporting period is associated with the calendar year in which or with which the reporting period ends. Thus, for example, a case initiated on 1 November 2006 would be considered a case initiated in the 2006 year for a competent authority keeping statistics on a calendar year basis, but would be considered a case initiated in the 2007 year for a competent authority keeping statistics on the basis of a reporting period ending on 30 September 2006. The template suggests that the report for a given reporting period should include itemized information on the disposition of cases initiated during the 5 preceding reporting periods and aggregated information for any cases initiated during any older periods. Competent authorities who are not reasonably able to provide such itemized information for some or all of the cases initiated before their first period of reporting may provide the information on an aggregated basis.