OECD/G20 Base Erosion and Profit Shifting Project Making Dispute Resolution More Effective – MAP Peer Review Report, South Africa (Stage 2) Inclusive Framework on BEPS: Action 14

Under Action 14, countries have committed to implement a minimum standard to strengthen the effectiveness and efficiency of the mutual agreement procedure (MAP). The MAP is included in Article 25 of the OECD Model Tax Convention and commits countries to endeavour to resolve disputes related to the interpretation and application of tax treaties. The Action 14 Minimum Standard has been translated into specific terms of reference and a methodology for the peer review and monitoring process. The peer review process is conducted in two stages. Stage 1 assesses countries against the terms of reference of the minimum standard according to an agreed schedule of review. Stage 2 focuses on monitoring the follow-up of any recommendations resulting from jurisdictions' stage 1 peer review report. This report reflects the outcome of the stage 2 peer monitoring of the implementation of the Action 14 Minimum Standard by South Africa Foreword Table of contents Abbreviations and acronyms Executive summary Reference Introduction Notes Part A. Preventing disputes [A.1] Include Article 25(3), first sentence, of the OECD Model Tax Convention in tax treaties [A.2] Provide roll-back of bilateral APAs in appropriate cases Notes References Part B. Availability and access to MAP [B.1] Include Article 25(1) of the OECD Model Tax Convention in tax treaties [B.2] Allow submission of MAP requests to the competent authority of either treaty partner, or, alternatively, introduce a bilateral consultation or notification process [B.3] Provide access to MAP in transfer pricing cases [B.4] Provide access to MAP in relation to the application of anti-abuse provisions [B.5] Provide access to MAP in cases of audit settlements [B.6] Provide access to MAP if required information is submitted [B.7] Include Article 25(3), second sentence, of the OECD Model Tax Convention in tax treaties [B.8] Publish clear and comprehensive MAP guidance [B.9] Make MAP guidance available and easily accessible and publish MAP profile [B.10] Clarify in MAP guidance that audit settlements do not preclude access to MAP Notes References Part C. Resolution of MAP cases [C.1] Include Article 25(2), first sentence, of the OECD Model Tax Convention in tax treaties [C.2] Seek to resolve MAP cases within a 24-month average timeframe Figure C.1. Evolution of South Africa’s MAP caseload Figure C.2. End inventory on 31 December 2019 (25 cases) Figure C.3. Evolution of South Africa’s MAP inventory: Pre-2016 cases Figure C.4. Evolution of South Africa’s MAP inventory: Post-2015 cases Figure C.5. Cases closed in 2016, 2017, 2018 or 2019 (34 cases) [C.3] Provide adequate resources to the MAP function Figure C.6. Average time (in months) to close cases in 2016-19 [C.4] Ensure staff in charge of MAP has the authority to resolve cases in accordance with the applicable tax treaty [C.5] Use appropriate performance indicators for the MAP function [C.6] Provide transparency with respect to the position on MAP arbitration Notes References Part D. Implementation of MAP agreements [D.1] Implement all MAP agreements [D.2] Implement all MAP agreements on a timely basis [D.3] Include Article 25(2), second sentence, of the OECD Model Tax Convention in tax treaties or alternative provisions in Article 9(1) and Article 7(2) Notes Reference Summary Annex A. Tax treaty network of South Africa Annex B. MAP Statistics Reporting for the 2016, 2017, 2018 and 2019 Reporting Periods (1 January 2016 to 31 December 2019) for pre-2016 cases Annex C. MAP Statistics Reporting for the 2016, 2017, 2018 and 2019 Reporting Periods (1 January 2016 to 31 December 2019) for post-2015 cases Glossary