Document 2507659

Tax Controversy and Dispute Resolution Alert
Pricing Knowledge Network Alert
EU Joint Transfer Pricing Forum
releases 2012 statistics on APAs and
pending cases under the EU
Arbitration Convention
October 9, 2013
In brief
In August 2013, the EU Joint Transfer Pricing Forum released its preliminaryi annual statistics on the
number of advance pricing agreements (APA) and pending mutual agreement procedures (MAP) under
the EU Arbitration Convention for 2012.ii The APA figures provide an interesting insight into possibilities
for taxpayers to request unilateral or bilateral APAs in the different EU Member States. In addition, the
statistics on MAP cases attempt for the first time, to shed light on the reason why MAP cases are still
ongoing more than two years after their initiation.
These statistics coincide with the OECD’siii 2012 annual statistics on the MAP caseloads of its member
countries and Partner economies.
In detail
Number of APAs concluded
by EU Member States
continues to rise
The 2012 APA statistics indicate
that the total number of APAs in
force within the EU Member
States (both with EU and nonEU counterparts) amounted to
390 cases at the end of 2012,
representing an increase of 29%
compared to 2011 (302 cases).
Significant increases in the
number of APAs in force at the
end of 2012 can be particularly
observed in the Czech Republic,
Hungary and the Slovak
Republic.
Significant variances in the
number of APAs also exist
among the different EU Member
States. Whereas the statistics
illustrate the flourishing ruling
practice in the Netherlands (295
requests received in 2012 and
247 rulings granted), it becomes
evident that other EU Member
States such as Estonia and
Lithuania (APA legislation since
1/1/2012) have yet to report any
APA requests or advance
rulings. Moreover, six EU
Member States (i.e. Bulgaria,
Cyprus, Greece, Latvia, Malta
and Slovenia) do not have an
APA programme under their
local legislation.
Number of pending MAP
cases under the EU
Arbitration Convention
reaching new heights
Together with the APA
statistics, the EU Joint Transfer
Pricing Forum also released
statistics on the number of
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Tax Controversy and Dispute Resolution Alert
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pending MAP cases under the EU
Arbitration Convention (AC). The
total number of pending cases at the
end of 2012 amounted to 738,
representing an increase of
approximately 5.6% when compared
to the opening inventory of cases in
January 2012 (699). This can be
partly explained by a mismatch in
cases initiated (225) and completed
(187) in 2012. Not surprisingly, a
significant number of these pending
AC cases at 31 December 2012 are
registered in the EU’s largest
economies Germany and France
(31.0% and 21.3% respectively of the
total number). From the data reported
(not all EU Member States submitted
information), the average time for
cases to be completed in 2012 ranges
from 9 months (Luxembourg) to 47
months (Spain).
For the first time, the 2012 AC
statistics include information on the
most common reasons for AC cases
still being pending 2 years after
initiation. A small proportion of these
cases have been referred to or are
currently in arbitration (total 2%),
with more common reasons including
ongoing court proceedings (16%) or a
joint agreement between Competent
Authorities and the taxpayer to waive
the time limit (24%). Most of the old
cases are however recorded as
pending for “other reasons” (37%).
In the view of these developments, the
EU Joint Transfer Pricing Forum
continues to actively monitor the
effective functioning of the EU AC.
During its meeting on 6 June 2013 the
EU Joint Transfer Pricing Forum
discussed the second phase of the AC
(arbitration phase) and heard from
members of the advisory commission
on their experience with the
administrative aspects of the
arbitration procedure. Comments
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were made on the respective
provisions of the AC and the revised
Code of Conduct on the effective
implementation of the AC. Discussion
focused on whether these provisions
provide sufficient guidance on the
arbitration procedure.
Suggestions were also made on how to
further improve the practical
functioning of the second phase of the
AC. Several items were discussed
during the meeting, with the following
outcome:
 Ensuring access to arbitration
under the AC has been identified as
an ongoing discussion item for the
improvement of the functioning of
the AC.
 With respect to the composition
and functioning of the advisory
commissions, it was recommended
that each tax administration
should not appoint more than one
member each.
 As regards to the content and
format of the information to be
provided in arbitration
proceedings, it was found that the
provision of formal and detailed
guidance by the advisory
commission to the taxpayer is not
straight-forward, given the factspecific nature of each case in
transfer pricing.
legal implications in the various
Member States. This outstanding
item will be further taken up in the
process of improving the
functioning of the AC.
Add-on: OECD’s mutual
agreement procedure statistics
for 2012
Resulting from its 2006 public
discussion draft “Proposals for
Improving Mechanisms for the
Resolution of Tax Treaty Disputes”
and the subsequent public
consultation, the OECD concluded
that a periodic analysis of MAP cases
initiated on the basis of Double Tax
Treaties would provide useful
information on longer-term trends. As
a result, OECD member countries and
Partner economies agreed to submit
annual reports containing statistical
information on their MAP caseloads.
As part of this initiative, the OECD
recently published its 2012
consolidated annual statistics.
The new OECD MAP statistics
indicate that the total number of open
MAP cases reported by OECD
member countries was 4,061 in 2012,
which is an increase of 5.8%
compared to the 2011 reporting period
(3,838). The following graph
illustrates the trend in number of
open MAP cases since 2006.
 No conclusion has been reached
regarding the remuneration of
chairmen and independent
members of advisory commissions.
 Whether or not agreements
resulting from the arbitration
procedure are always subject to
approval of the taxpayer appears to
be an issue which has different
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Tax Controversy and Dispute Resolution Alert
Pricing Knowledge Network Alert
Let’s talk
For more information, please contact:
Transfer Pricing
Isabel Verlinden, Brussels
+32 2 710 4422
[email protected]
Xavier Van Vlem, Ghent
+32 9 268 8311
[email protected]
The takeaway
In summary
The 2012 statistics published by the
EU Joint Transfer Pricing Forum and
the OECD make it clear that tax
controversy and dispute resolution
continue to be a main area of
international taxation and transfer
pricing. It is encouraging to see that
policy makers actively monitor
existing instruments and review them
for their effectiveness and
accessibility.
On the other hand, the 2012 APA
statistics of the EU Joint Transfer
Pricing Forum also indicate that more
tax administrations and tax payers are
making use of advance pricing
mechanisms to avoid lengthy disputes
on the pricing of intra-group
transactions.
Eric Bonneaud, Paris
+33 01 56 57 41 33
[email protected]
Ionut Simion, Bucharest
+40 21 225 3702
[email protected]
Madlen Haupt, Brussels
+32 2 710 4087
[email protected]
i
At the moment of the publication, no data for Italy was available.
Available on the website of the European Commission (click here for APA statistics and the MAP overview).
iii Available on the website of the OECD.
ii
© 2013 PricewaterhouseCoopers LLP. All rights reserved. In this document, PwC refers to PricewaterhouseCoopers (a Delaware limited liability partnership),
which is a member firm of PricewaterhouseCoopers International Limited, each member firm of which is a separate legal entity.
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