On 16 September 2019, the OECD published statistics from the Mutual Agreement 2018 (MAP) procedure covering the 89 members who joined the Interdependence Framework (IF) before 2019. These statistics reflect the commitments made by members of the Integrative Framework for Erosion and Fundamental Benefit Transfer (BEPS) to meet the minimum standard of action 14 of the BEPS Action Plan, which includes, among other things, timely and comprehensive reporting of these statistics. With regard to transactions between Romanian companies and their associated foreign companies residing in other Member States, the double taxation that could result from the adjustment of profits, on the one hand, should, in principle, be eliminated by appropriate mirror adaptations on the basis of the Convention on the Elimination of Double Taxation linked to the adjustment of the profits of associated companies or on the basis of bilateral double taxation conventions. The corresponding procedure has yet to be defined in Romanian legislation in this regard (i.e. procedures for mutual agreement). It is interesting to note that, on average, countries closed more cases than they started in 2018. Tax authorities in many countries have tried to improve understanding of how POPs work by providing detailed instructions on procedures, and many have increased their resources to deal with map files. We welcomed the OECD initiative to award awards for best performance in the processing and resolution of map files, and to facilitate meetings between relevant authorities at OECD events. In light of these developments, it is more important than ever that taxpayers and their advisors “deviate” from the historical reservations of the POPs process and take objectively and well-informed account of the use of POPs.
Of the 2,704 cases resolved in 2018, 59% resulted in an agreement that did not replace, in whole or in part, double taxation, in accordance with the tax treaty. 17% of cases were resolved unilaterally by a contractor and 4% were resolved on the basis of national remedial measures. Only 2% of the cases were concluded without agreement, including an agreement that did not agree. The remaining 18% were: cases withdrawn by the taxpayer (6%); if an objection was found to be unjustified or accepted that there was no tax that did not comply with the tax treaty (5%); where access to POPs was denied (6%); and all other results (1%).