On February 1, 2023 the OECD published a Manual on the Handling of Multilateral Mutual Agreement Procedures (MAPs) and Advance Pricing Arrangements (APAs). Although the manual is intended for tax authorities, it is certainly also very interesting reading material for any tax professional that is active in international taxation.

This Manual on the Handling of Multilateral MAPs and APAs (MoMA) is intended as a guide to multilateral MAP and APA processes and how they could function. It provides tax administrations and taxpayers with basic information on the operation of such procedures and suggests different approaches based on the existing practices of jurisdictions, without imposing a set of binding rules upon jurisdictions. Further, it is not intended that jurisdictions be subject to any review or monitoring in relation to the implementation of any of the guidance in this Manual. In general, the approaches outlined in this Manual apply to both MAPs and APAs, except in sections where different approaches have been identified as ideal for each of these procedures.

The approaches contained in the Manual are based on the approaches already undertaken by jurisdictions. Although taxpayers and tax administrations should consider these approaches while looking at multilateral MAP or APA processes, it is recognised that it may not always be possible to apply an approach as described in this Manual or that there may be situations where application may not be appropriate. It is also recognised that all references to timeframes for various steps in multilateral MAP or APA processes in this Manual are indicative and should only be treated as aspirational by jurisdictions.

In assessing whether implementation of any approach is appropriate, jurisdictions should take into account the circumstances of their own MAP and APA programmes and processes and the unique features of each case. It is paramount that the approaches be applied appropriately and with enough flexibility to improve current MAP and APA processes. However, to the extent appropriate, jurisdictions may adapt, refer to or link to the Manual in their domestic guidance on multilateral MAP or APA processes to provide clarity on the procedures applicable in such cases.

In the Manual a.o. the following subjects are being discussed:

• Introduction
  • Outline of the project
  • Challenges arising in multilateral cases
  • Overview of experiences
• Basis for handling multilateral MAP and APA cases
  • Definition of a multilateral case
  • Legal basis for handling multilateral cases
  • The request in multilateral cases
    • The multilateral APA request
    • The request in the 25(3) Approach
    • The request in the 25(1) Approach
    • Form and contents of a multilateral case request
  • Access to multilateral procedures and the Action 14 minimum standard
• Procedural aspects to consider in multilateral cases
  • Approaching the other jurisdictions involved
    • Approaching the other jurisdiction in a MAP case
    • Approaching the other jurisdiction in an APA case
  • Possible approaches to discussions in the multilateral stage
    • Approaches outlined under the OECD Model and EU Instruments
    • Suggested approaches
  • Coordination of procedural matters
  • Discussions in a multilateral case
    • Position papers and responses
    • Conduct of discussions
    • Conclusion of the agreement
    • Reporting of statistics
  • Interaction with available domestic remedies or procedures
  • Implementation of the agreements
  • Arbitration where there is no MAP agreement
  • The rights, obligations and role of the taxpayer in multilateral cases
• Examples of multilateral cases
  • Transfer pricing cases
  • Profit attribution to permanent establishments
  • Hybrid entities
  • Dual-residence or multiple-residence issues
• Ideal timeline for a typical multilateral case

The Manual on the Handling of Multilateral Mutual Agreement Procedures (MAPs) and Advance Pricing Arrangements (APAs) as released by the OECD on February 1, 2023 can be downloaded from the OECD website here.

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