Article 25 contains three distinct areas in which the mutual agreement procedure is generally applied. The objective of BEPS 14 was to find solutions to remove barriers preventing countries from addressing contract disputes under the POP, including the absence of arbitration provisions in most contracts and the fact that, in some cases, access to POPs and arbitration may be denied. In its 2015 final report, “Dispute Resolution Mechanisms for the Application of Dispute Resolution Mechanisms” (final report), the OECD highlighted the fundamental importance of the map mechanism for the proper application and interpretation of tax treaties, the development of minimum standards for dispute resolution and a series of recommendations on best practices. Some might argue that arbitration has the advantage of encouraging Member States to settle disputes before the two-year deadline expires, which would be a success rather than a failure of the convention. However, statistics also show that 202 cases had exceeded the two-year deadline, while it had been cancelled with the taxpayer`s consent. This indicates that taxpayers do not always view the arbitration available to them under the agreement as a desirable means of resolving double taxation. In order to avoid double taxation due to possible measures taken by the tax administrator of another state in connection with the future controlled transaction, it is desirable to ask, by asking for the alignment of the principles of pricing of future controlled transactions and the conclusion of the agreement with the competent authority of another foreign state, in accordance with the provisions of the applicable tax treaty between the Republic of Lithuania and another State, in order to avoid double taxation of income and capital. Once the application has been submitted, the procedure of mutual agreement can be initiated in accordance with the procedure provided for by the acts. The IRAS recognizes the importance of tax security in the rapidly changing business environment and is committed to helping taxpayers resolve tax disputes consistently and principledly, in accordance with recognized international tax rules and principles.
When a Singapore tax subject is subject to double taxation as a result of adjustments made either by the IRAS or by a foreign certification body to transfer prices for its transactions with related parties, it may apply to the IRAS to resolve the double taxation through a MAP. For more information, see the Map profile of Singapore (595 KB). Singapore has been peer-reviewed at Level 1 within the OECD/G20 Base Erosion and Profit Shifting Project (BEPS) – Action 14. The “peer review report,” which reflects the results of Singapore`s assessment of the implementation of Minimum Standards of Action 14 (accompanied by a “best practice report” on the implementation of best practices in Singapore), was published on 12 March 2018. These reports are available on the OECD website. In particular, Article 19 of the compulsory arbitration procedure must be mandatory if the competent authorities are unable to reach an agreement on the settlement of a case within two years of their start. This is a significant restriction on POPs cases in the past, as the competent authorities were only required to try to resolve cases and disputes could be resolved indefinitely. Section 19 ensures that treaty disputes will be resolved within a specified time frame, making the MAP a more attractive option for taxpayers. In addition, sections 20 to 25 provide for the practical functioning of arbitration. In the past, it was often practical constraints or a lack of agreement on how to proceed that blocked the solution.