What is MAP?
MAP is the mutual agreement procedures agreed between the tax authorities of countries to improve the existing international tax disputes resolution procedure and to develop a supplementary dispute resolution mechanism. In the event a taxpayer disagrees with the tax authorities on an international tax matter, the taxpayer may initiate a MAP in order to resolve the conflict arising due to the different interpretations of the tax authorities.
What taxes are covered under MAP?
Below are few examples of taxes covered under MAP:
- Transfer pricing issues involving cross border transactions.
- Withholding tax issues regarding interpretation of the application of double tax treaties.
- Income tax issues regarding permanent establishment of the contracting state.
- Tax issues relating to the application of treaty anti-abuse provisions.
MAP also covers the cases where taxpayers are allowed to request for MAP assistance in cases where the issue under dispute has already been decided via the judicial and administrative remedies provided by the domestic law of your jurisdiction.