Following the document on international tax disputes recently published by the CIAT Executive Secretariat, we would like to share with you some reflections.

In general, and taking developed countries as a reference, the networks of treaties to avoid double taxation tend to be small or non-existent in developing countries. Proof of this is that in CIAT member countries in Latin America and the Caribbean, 78% of the total tax treaties in force are concentrated in 7 countries. [1]

However, it is estimated that little by little the number of agreements will increase and the demands of the context (e.g.: motivate foreign investment in the face of the advance of regulations that limit tax benefits) will drive the updating of existing agreements and their effective application, which involves the need to gain skills to prevent and resolve international disputes.

In order to help identifying opportunities for improvement in the area of dispute prevention and resolution, CIAT, with the support of the EUROsociAL+ Program and the Inter-American Development Bank (IDB), developed the Maturity Model on Prevention and Resolution of Domestic and International Disputes, which offers a set of indicators oriented to the prevention and resolution of international disputes.

Within the framework of this work, we convened renowned international experts who prepared a document that highlights the main challenges, opportunities and good practices that developing countries should consider when addressing these issues. In this regard, together with Natalia Quiñones (Colombia), Ubaldo González (IDB) and Edson Uribe (Mexico), we coordinated the preparation of a document entitled: Dispute Resolution for International Taxation: Reflections on Arbitration, the Mutual Agreement Procedure, and Mediation, which is only available in English.

This document highlights the following central ideas:

• •The importance of preventing and resolving international tax disputes and maintaining a good level of international cooperation, in order to foster confidence among taxpayers.
• •The importance of certainty, procedural transparency and accessibility to dispute resolution mechanisms.
• •The need for legal and regulatory powers and time limits, considering the availability of domestic resources.
• •The need to analyze the challenges faced by developing countries in implementing mutual agreement procedure regulations to meet the minimum standard of BEPS Action 14.
• •Emphasizes the importance of monitoring the evolution of international tax arbitrage and its challenges for developing countries
• •Analyze the lack of arbitrability, the proliferation of disputes with globalization and arbitration arising from investment protection treaties.
• •The relevance of reflecting on the role of mediation in international tax cases, evaluating its potential as a complementary or alternative tool for dispute resolution..

In addition, ideas on some specific challenges are developed. Among them, we consider the following to be among the most relevant challenges for developing countries in implementing the BEPS Action 14 Minimum Standards

• •Alignment of internal regulations to the best practices identified in the Action’s peer review documents.
• •Dependence on tax treaty partners at the time of ratification of the BEPS Multilateral BEPS Instrument (MLI), political uncertainties associated with parliamentary ratification times, renegotiation with treaty partners that have not signed or ratified the MLI complicate this process.
• •Given the reduced ability to attract investment through tax incentives or low rates, due to international initiatives that lead to the adjustment (or revision of) tax incentives, it is key to define strategies that increase the certainty of the tax incentives.
• •Resource management is a critical challenge for developing countries in implementing the minimum standard of Action 14. Countries must ensure sufficient human and financial resources to upgrade the system and ensure that the country’s interests are adequately represented in the MAPs. This implies the creation of teams that include officials in charge of drafting and approving legislation, and officials to oversee its implementation.
• •The minimum standard requires that the competent authorities in charge of the MAP function have a number of legal and administrative powers that, in many cases, must be granted by law. In this regard, countries should carefully review these powers, since the absence of MAP cases may have made it unnecessary to establish the powers conferred on the competent authorities in existing treaties.
• •The ability to implement MAP agreements, regardless of internal deadlines, must be explicitly provided for in the law, which often requires legal reform. In addition, personnel assigned to the MAP function must have the status of competent authority, allowing them to negotiate on behalf of the country in each bilateral or multilateral MAP procedure.
• •The coexistence of the Amicable Procedure (MAP) with domestic remedies available in the countries poses significant challenges. When a taxpayer resorts to several mechanisms at the same time, contradictory decisions may arise, generating uncertainty and weakening the effectiveness of the system. One of the critical points is the collection of tax debts. In many countries, this is only stopped by a court action. However, a MAP application does not have automatic effect. It is therefore essential to establish clear rules on how access to MAP is articulated with collection mechanisms.

In addition to issues related to the MAP, the paper discusses other mechanisms that bring their own challenges and opportunities. For example, arbitration seeks binding solutions to international disputes, but also presents challenges for developing countries, including high costs, doubts about the impartiality and concerns about countries’ sovereignty. Mediation, on the other hand, offers a more flexible and cooperative, though little explored, avenue. Its success will depend on creating adequate incentives for taxpayers to use it and on strengthening institutional capacities.

For those who wish to go deeper into these aspects, the complete document is available for reading and downloading.

One size does not fit all, there is no one-size-fits-all approach that can be considered the best option. What is certain is that countries need to rethink their dispute resolution strategies, with a view to achieving a balance between certainty, efficiency, international cooperation and protection of their national interests.

[1] View information within the Tax Treaty Database in CIAT Data, 2025.

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