Under BEPS Action 14, members of the OECD/G20 Inclusive Framework on BEPS have committed to implement a minimum standard to strengthen the effectiveness and efficiency of the mutual agreement procedure (MAP). The MAP is included in Article 25 of the OECD Model Tax Convention and commits countries to endeavour to resolve disputes related to the interpretation and application of tax treaties.

The BEPS Action 14 Minimum Standard has been translated into specific terms of reference and a methodology for the peer review and monitoring process. The peer review process is conducted in two stages. Stage 1 assesses countries against the terms of reference of the minimum standard according to an agreed schedule of review. Stage 2 focuses on monitoring the follow-up of any recommendations resulting from jurisdictions' Stage 1 peer review report.

The stage 2 peer review monitoring reports that the OECD released on April 14, 2022 reflect the outcome of the Stage 2 peer monitoring of the implementation of the BEPS Action 14 Minimum Standard in:

·     Andorra;

·     Bahamas;

·     Bermuda;

·     British Virgin Islands;

·     Cayman Islands;

·     Faroe Islands;

·     Macau (China);

·     Morocco; and

·     Tunisia.

The results from the peer review and peer monitoring process demonstrate positive changes across all nine jurisdictions, although not all show the same level of progress. Highlights include:

·     The Multilateral Instrument was signed by Andorra, Morocco and Tunisia, with the instrument already being ratified by Andorra, which will bring a substantial number of their treaties in line with the Action 14 minimum standard. In addition, there are bilateral negotiations either ongoing or concluded.

·     Bahamas, Bermuda, British Virgin Islands, Cayman Islands, Faroe Islands, Macau (China), Morocco and Tunisia now have a documented bilateral notification/consultation process that they apply in cases where an objection is considered as being not justified by their competent authority.

·     The Faroe Islands closed MAP cases within the pursued average time of 24 months, whereas Andorra, Bahamas, Bermuda, British Virgin Islands, Cayman Islands, Macau (China) had no MAP experience.

·     Andorra, Macau (China) and Tunisia ensure that MAP agreements can always be implemented notwithstanding domestic time limits.

·     Bermuda, Faroe Islands, Macau (China), Morocco and Tunisia have issued or updated their MAP guidance.

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