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Are Mutual Agreement Procedures Efficient?

18th October 2021

Mutual agreement procedures (MAP) are instruments used to resolve international tax disputes. And while the tool exists in many countries, it’s not always a well-oiled machine in each one. In fact, the OECD released a MAP peer review on October 18 and found that procedure could stand improvement in Brazil, China, and Russia—countries that don’t have the resources to keep up with MAP caseloads. Brazil, whose MAP cases have doubled in recent years, seems to take its sweet time resolving MAP disputes—44 months on average! That’s nearly two times longer than the 24-month window the OECD would prefer. The report suggests that Brazil should provide additional competent authority resources to manage the high-volume of cases. China has to step it up, too. The country’s averaging 34 months to resolve MAP issues. And while Russia resolves MAP issues fairly quickly—cases are resolved under an average (and very impressive) 15 months—the group found its competent authority team isn’t the best at getting back to taxpayers, often leaving them hanging without responses to position papers and letters.