Mutual Agreement Procedure (MAP):
Mutual Agreement Procedure (MAP) is the important argument decree mechanism that is exists regardless of remedies offered in domestic tax laws.
In matters appropriate to possible double-taxation not in agreement with a Double Tax Convention the choice on hand before/after any domestic organizational appeals procedure is to either:
- Apply for mutual agreement procedure under the relevant treaty; or
- Litigate the matter in through the court.
Globally, the key dispute resolution method in use is MAP. MAP is available irrespective of treatment on hand in domestic tax laws and addition local remedies. The performance of MAP overrides the condition of the domestic law limits.
Under MAP, the Revenue Authorities of two separate nations together struggle to resolve a dispute that way to double taxation. Transfer Pricing cases, in terms of an result adjustment.
The effect of using the MAP process could result in the following:
- An agreement would be reached between the tax authorities that reduce double taxation or conflicting taxation.
- An agreement would be reached between the tax authorities that only partially reduce double or conflicting taxation.
- No agreement would be achieved.
- Request for MAP, rejected by the proficient Authority.
MAP terminated at the taxpayer's appeal (beneficial, as the subject can be pursued through the courts, if the agreement achieved is not favorable).
It would be valuable investigate the different dispute resolution method, as the Revenue Authorities are doubtful to give-up on the destructive positions being currently choose by them and the appellate procedures would a massive time consuming matter. Hence, mutual agreement procedure is an obvious alternative value considering and once a resolution is achieved it would form the basis for following periods.
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