ICTD Summary Brief 7

This Briefing summarises ICTD Working Paper 55, which examines the Mutual Agreement Procedure (MAP) for tax authorities to resolve their differences over the interpretation of tax treaties. It surveys available evidence on reasons for the increase in such conflicts, and analyses proposals for improving the MAP, especially mandatory binding arbitration. Despite the shift to arbitration in the past decade among Organisation for Economic Cooperation and Development (OECD) states, there has been a continued rise in conflicts and in the time taken to resolve them. It seems inappropriate, especially for developing countries, to deal with these important issues through international procedures cloaked in total secrecy. A better approach would be to aim to minimise conflicts by developing clear and simple rules for apportioning the income of integrated transnational corporations (TNCs), and agreeing interpretations of tax treaty provisions that can be made public. Greater transparency is the best way to provide the clarity and predictability that business needs, and to reassure the public that decisions on international taxation are fair.


Sol Picciotto

Sol is an emeritus professor at Lancaster University, a Senior Adviser of the Tax Justice Network, coordinator of the BEPS Monitoring Group, and a member of the UN Tax Committee's subcommittee on dispute resolution. As a Senior Fellow of the ICTD, his research focuses on the taxation of transnational corporations with special reference to developing countries.
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