Nevertheless, the POPs process suffers from several shortcomings, although international policy makers (such as the OECD) have recently taken several steps to improve the process. First, the POP is a complex and tedious exercise. Second, the procedure does not guarantee conflict resolution in all situations, since the majority of States – which have signed the Multilateral Instrument (MLI) – have not signed mandatory arbitration. Third, the different rules and practices of countries can create unnecessary problems to carry out a POP. For example, in countries, there are no uniform rules for calculating the launch date of the three-year pop launch period. Finally, the interaction between the POP and internal remedies and the binding nature of a result map for the taxpayer are essential to the proper functioning of a POP. Since the result of an MAP is not binding on national courts, the taxpayer could continue to sue in some jurisdictions if the outcome of a POP is not favourable to him. The only way to achieve an effective outcome on POPs is therefore absolute international cooperation and coordination that is not easy to achieve. In summary, the POST BEPS PROGRAMME may not be an effective tool for resolving cross-border tax disputes, particularly in a developing country.
Today, more than 135 countries have implemented the recommendations of the BePS (Base Erosion and Profit Shifting) project, which aims to improve this process. As a result, the MultiLATERALe BePS (MLI) instrument is available. However, the MLI only applies to tax treaties concluded with other legal systems that have ratified the LML and which also include this treaty in their list of covered tax treaties. In addition, contracting states may express reservations when the MLI is adopted. Comparison of the Adjustment Process with the Legal Double Taxation Reduction Process Read more In a report by KPMG: Transfer Pricing Litigation Management [PDF 774 KB] (November 2019) As part of the bePS Project transfer pricing, Brazil referred to Note 1 of the BEPS 8-10 measures. On the one hand, Brazil will continue to apply the fixed margin system to ensure its feasibility, as this method establishes a profit margin for all transactions in a prestigious economic sector. On the other hand, Brazil will take over the content of this report under the fixed margin system. While this commitment appears to be purely diplomatic language, Brazil also guarantees in Note 1 that it will grant access to POPs to transfer prices as follows: neither the OECD model, nor the OECD commentary, nor the OECD transfer pricing guidelines (TPG) establish a methodology for making adjustments.