OECD Arbitration in Tax Treaty Law

1. S. 169Introduction

Upon request of the G20 in 2013, the OECD published the Action Plan on Base Erosion and Profit Shifting (“BEPS”) which proposed measures to ensure that profits are taxed where the economic activities that generate them are carried out and where value is created.

This Action Plan included 15 different actions to combat BEPS. In the follow-up work carried out in 2014, draft reports were issued corresponding to each action and, in 2015, the individual final reports were finally issued which included minimum standards in Actions 5, 6, 13, and 14. As a minimum standard, we can understand some minimum rules that have to be follow by all of the countries that are part of the consensus on BEPS.

In this document, the preliminary suggestions will be explained regarding arbitration as part of the Mutual Agreement Procedure (“MAP”) included in the draft report on Action 14 (“Draft Report”) and its differences with the content of the Action 14 final report (“Final Report”) which was finally used to update the OECD Model Convention in 2017.

As was mentioned, the arbitration process is a complementary part of the MAP. In that sense, when we talk about improving the MAP procedure, this...