The mutual agreement procedure (MAP) has long been criticized. From the
perspective of transaction cost theory, the deficiencies of the mechanism primarily
reflect three types of transaction costs: agency cost, bargaining cost, and
administrative cost, all of which can be economized via the digitalization of
international tax dispute resolution (ITDR) processes. The impetus for the
development of digital ITDR becomes more prominent considering the current
Covid-19 pandemic. Furthermore, compared with dispute resolution mechanisms in many other domains, the ITDR process particularly lends itself to digital facilitation.
However, data from peer review reports under Action 14 of the Base Erosion and
Profit Shifting (BEPS) Project shows that the international practice of the digital
ITDR still remains at a rudimentary stage. This underdevelopment can largely be
attributed to a decentralized approach to the ITDR development at the international level. In this regard, it is proposed that the OECD can play a greater role in leading and coordinating the development of digital ITDR at the global level. In particular, a global digital platform is envisaged to facilitate the digital ITDR processes among competent authorities.


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Cite as

Cai, Q. & Malamis, S. 2021, 'Digitalization of International Tax Dispute Resolution : Reflection in Light of the Covid-19 Pandemic', Intertax, 49(8-9), pp. 656-673. https://hdl.handle.net/2164/17998

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Last updated: 16 June 2022
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