Indo-Japan cooperation wins OECD MAP 2019 award for highest agreement ratio in transfer pricing cases

Indo-Japan cooperation has won the Organisation for Economic Co-operation and Development (OECD) Mutual Agreement Procedure 2019 Award for highest agreement ratio for a pair of jurisdictions for transfer pricing cases, said finance ministry sources.

The Award to India-Japan Mutual Agreement Procedure (MAP) cooperation demonstrates India’s commitment to provide tax certainty and efficacious dispute resolution mechanism for the Japanese companies doing business in India, sources added.

A large number of Japanese companies do business in India in manufacturing as well as trading sectors. All jurisdictions which joined the Inclusive Framework prior to 2020 were considered for these awards.


India as an inclusive framework jurisdiction is committed to implement the minimum standards under Base Erosion and Profit Shifting (BEPS) Project’s Action 14 on ‘Making Dispute Resolution Mechanisms More Effective.’

MAP under the tax treaties addresses tax disputes arising from cross border transactions by foreign companies and non-residents. India has provision for MAP in all its tax treaties.

The OECD published the latest 2019 MAP statistics covering 105 jurisdictions and almost all MAP cases worldwide, showing that cases were still taking a long time to resolve, about 25 months on average.

The figures show that the number of cases keeps increasing, with seven MAP cases having started every day in 2019 (three transfer pricing cases and four other cases).

This amounts to almost 2,700 new cases in 2019 alone. This is more than in 2018 and means the number has nearly doubled since 2016.

The statistics reveal that the number of cases closed is increasing as well, but at a slower pace.

Competent authorities were able to close more cases in 2019 than in 2018, but the increase cannot keep up with the increase in new cases, reports showed.

Hence, inventories are increasing in the majority of jurisdictions, despite the fact that competent authorities have increased their capacity and closed approximately 50% more transfer pricing cases and 70% more other cases in 2019 than in 2016.