The UAE’s Ministry of Finance issued today a Mutual Agreement Procedure (MAP) guidance to provide clarity and guidance to taxpayers on the eligibility of MAP, the MAP process and the information required for a MAP claim.
The Mutual Agreement Procedure provides taxpayers with the possibility to seek relief from double taxation under the applicable double tax treaty. The guidance also provides clarity to taxpayers on the scenarios where double taxation may occur, such as a tax assessment resulting in a cross-border transfer pricing adjustment or the determination of the existence of a cross-border permanent establishment.
MAP claim timeline clarified
The UAE’s double taxation relief guidance further clarifies the timelines in which taxpayers must make a MAP claim, which is typically within 3 years from when a taxpayer is aware that double taxation may occur.
It also confirms that rulings on tax matters issued by a UAE domestic judicial court or the Tax Dispute Resolution Committee may impact the scope of relief that the UAE Competent Authority can provide if such cases are submitted to MAP.
Importantly, the UAE’s MAP guidance outlines a detailed list of information that is required from taxpayers wishing to submit an eligible double taxation relief claim and that the UAE Competent Authority will seek to resolve all MAP cases as soon as possible and within the best practice timelines prescribed by the Organisation of Economic Cooperation and Development (OECD), subject to the timely submission of relevant information from taxpayers and the availability of the Competent Authority of the counterparty jurisdiction.
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Taxpayers to benefit from country’s tax treaty network
Given the large tax treaty network that the UAE possesses, the MAP guidance is critical information for taxpayers to consider when seeking relief from double taxation to verify the eligibility of their MAP claim, before submission, and determine which jurisdiction should receive its MAP claim.
The publishing of the MAP guidance will provide taxpayers with direction on how to access the MAP process and thus benefit from the UAE’s tax treaty network and ultimately seek to relieve instances of double taxation.
The publication of the MAP guidance reaffirms the Ministry of Finance’s commitment in ensuring certainty and transparency for UAE taxpayers.
