Mutual Agreement Procedure

  • Mutual Agreement Procedure (‘MAP’) is a procedure set out in most treaties which permit designated Government representatives to work together to resolve international tax disputes including issues involving double taxation, questions regarding residential status, tax recovery etc.
  • MAP is used to eliminate double taxation that can arise from transfer pricing adjustments.
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Eligibility for MAP

  • MAP application can be filed by a person when he considers that he has not been taxed in accordance with the Treaty.
  • Even if such person has other remedies such as appeal process under the domestic laws, MAP can be initiated. MAP can be applied in the country in which he is a resident or a national.
  • This can be presented within three years from the date of receipt of notice of the action which gives rise to taxation not in accordance with convention.

Steps in MAP application

Map Application

MAP process in India

Mapprocess 2
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Drawbacks of MAP

Drawbacksmap

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Penalties for non-compliance – Transfer Pricing

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Introduction to Transfer Pricing

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Income from transaction with Non-Residents – Transfer Pricing

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Secondary Adjustment – transfer pricing

Secondary Adjustment – transfer pricing Introduction As per the OECD’s TP guidelines for Multinational Enterprises and Tax Administrations (OECD TP Guidelines), secondary adjustment may take the form of constructive dividends, constructive equity, or constructive loans.The provisions of secondary adjustment are internationally recognized and are already part of the TP rules of many …
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