Decrease in global MAP inventories with more cases resolved and an increase in global APA inventories
The Organisation for Economic Cooperation and Development (OECD) on November 15, 2024, released mutual agreement procedure (MAP) statistics for 2023 and, for the first time ever, advance pricing agreement (APA) statistics.
In addition to these statistics, the OECD issued MAP and APA awards to tax administrations for notable achievements in promoting tax certainty.
MAP statistics
MAP is a treaty-based process through which tax administrations negotiate to eliminate double tax or other tax not in accordance with an applicable tax treaty.
After years of rising MAP inventories, the 2023 statistics show that for the first time, global MAP inventories are decreasing, with a marked uptick in the number of cases resolved. At the same time, the number of new cases fell vis-à-vis 2022 but remains in line with earlier years. The average time for concluding a MAP case increased, likely reflecting efforts to reduce the backlog of older cases.
In 2023, the U.S. Competent Authority completed 245 MAP cases, 159 of which involved transfer pricing issues. Of U.S. transfer pricing cases that were substantively resolved in MAP, 73% were fully resolved with another 10% partially resolved.
APA statistics
The APA statistics released by the OECD are less detailed than the MAP statistics and the APA statistics released directly by the IRS (read TaxNewsFlash). Still, they provide a valuable glimpse into the size of APA inventories around the world and the times required to complete APAs, including in many jurisdictions that do not otherwise publish APA statistics. While MAP inventories fell during 2023, global APA inventories increased to 4,080 pending APAs at the end of the year, illustrating the ongoing importance of tax certainty to taxpayers.