KPMG report: Progress on improving mutual agreement procedure

Progress that has been made in the cause of tax certainty and challenges that remain

Progress that has been made in the cause of tax certainty and challenges that remain

The OECD in recent years has placed improving tax certainty at the forefront of its agenda for international tax, often as an incentive in exchange for compromise on new global tax reforms to address the challenges arising from the digitalization of the economy and ending the perceived race to the bottom in corporate tax rates. Strengthening mutual agreement procedure (MAP)—a mechanism established by income tax treaties to relieve double taxation—has been a core part of efforts to improve tax certainty. For disputes between the United States and most of its large treaty partners, MAP now delivers consistently favorable outcomes—a significant improvement over the state of affairs before the OECD base erosion and profit-shifting (BEPS) action 14. Yet recent experience with MAP shows more progress is needed.

Read an April 2023 report* [PDF 390 KB] prepared KPMG LLP tax professionals that discusses the progress that has been made in the cause of tax certainty, as well as the challenges that remain.

*This article originally appeared in Tax Notes Federal and Tax Notes International (24 April 2023) and is provided with permission.



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