International Dispute Resolution: Global Perspectives and Opportunities GW-IRS Annual Tax Institute Washington, DC November 30, 2017

Transcription

1 International Dispute Resolution: Global Perspectives and Opportunities 2017 GW-IRS Annual Tax Institute Washington, DC November 30, 2017

2 Panelists Carol Dunahoo, Partner, Baker & McKenzie LLP (Chair) Article 25 of OECD and UN Models Jennifer Best, Director of Treaty and Transfer Pricing Operations, Large Business & International Division, IRS Deborah Palacheck, Director, Treaty Administration, Large Business & International Division, IRS Achim Pross, Head, International Co-operation and Tax Administration Division, Centre for Tax Policy and Administration, OECD William Sample, Vice-President Tax, Microsoft Corporation Theodore Setzer, Assistant Deputy Commissioner (International), LB&I, IRS Anna Theeuwes, TEI EMEA President 2

3 Agenda 1 Current Landscape 4 2 Improvement Initiatives 11 Dispute Prevention 12 Dispute Resolution 17 3 Outlook 19

4 1 Current Landscape

5 Current Procedures Dispute Prevention Issue / Dispute Dispute Resolution Guidance, Training Cooperative Compliance, ACAP Rulings APAs Simultaneous Audits Joint Audits Exam MAP Appeals, Courts Arbitration / Other ADR 5

6 New MAP Cases Initiated by OECD Member States New MAP Cases Initiated 3,000 2,500 2,259 2,509 2,000 1,500 1,599 1,341 1,624 1,678 1,910 1, Source: 6

7 MAP Caseload of OECD Member States 6,500 6,000 5,500 5,000 4,500 4,000 3,500 3,000 End of Year MAP Case Inventories 6,176 5,429 4,566 3,838 4,073 3,426 3, Source: 7

8 2016 MAP statistics

9 Jurisdictions with most MAP cases in end inventory 9

10 Outcomes of cases closed in

11 Practical Challenges Issues are resolved in most MAP cases, but practical challenges are growing Barriers to MAP consideration Settlements forced at exam level Arguments that issue is a domestic law issue, not a treaty issue Imposition of domestic law / procedural deadlines Rejection or inaction on request Cost and process complexity 11

12 Practical Challenges Inappropriate behavior in MAP negotiations Revenue-driven or other unprincipled positions MAP positions based on policy preferences instead of treaty provisions Unwillingness to concede or compromise particular issues Exclusion of perceived tax avoidance cases Stonewalling 12

13 Practical Challenges Institutional issues Competent Authority may have inadequate authority or institutional power to conclude MAP agreements Competent Authority staffing or other resource constraints Case volumes 13

14 2 Improvement Initiatives

15 Why Does it Matter?does it matter? G20 Leaders care Large percentage of revenue at stake We are also working on enhancing tax certainty G20 Leaders' Communiqué, Hamburg, 8 July 2017 Impact on FDI and growth 15

16 New Initiatives Dispute Prevention Issue / Dispute Dispute Resolution Guidance, Training Joint Risk Assessment Rulings Cooperative compliance, ACAP APAs Simult. Audits Joint Audits Exam MAP Appeals, Courts Arbitration, Other ADR 16

17 Process Overview Taxpayer Dispute prevention Domestic and multilateral cooperative compliance programmes ICAP APA Risk assessment / CbC Co-ordinated audits (joint, simultaneous, abroad) Filing of tax return Global awareness training for international tax examiners Domestic audits MAP Arbitration Dispute resolution Tax certainty 17

18 New Initiatives Dispute Prevention Pre-filing initiatives Improved risk assessment CbC reporting, other? Global awareness training Improvements to APA / ACAP procedures Cooperative compliance programs ICAP National-level programs 18

19 New Initiatives Dispute Prevention Coordinated audits Joint audits - FTA initiative Simultaneous audits - EU Fiscalis 2020 program 19

20 New Initiatives Dispute Resolution BEPS Action 14 minimum standards obligatory for all Inclusive Framework members MAP improvement measures MAP peer review process MAP case statistics reporting BEPS Action 14 best practices - optional MAP process improvements UN, EU, other initiatives 20

21 New Initiatives Dispute Resolution Arbitration MLI optional, with scope and process options EU Arbitration Directive required but limited in scope (trumps bilateral treaty or MLI provisions) OECD Model political commitment of OECD members (superseded by MLI where applicable) UN optional in current Model, further discussion in process 21

22 3 Outlook

23 Outlook What is on your wish list for the future? 23