Tag: Mutual agreement procedure (MAP)

Mutual agreement procedure (MAP) is a way through which tax administrations consult to resolve disputes regarding the application of double tax conventions. This procedure, described and authorised by Article 25 of the OECD Model Tax Convention, can be used to eliminate double taxation that could arise from a transfer pricing adjustment.

Nokia paid 202 million euro to settle a long running dispute with the tax authorities in India

Nokia paid 202 million euro to settle a long running dispute with the tax authorities in India

Under the Mutual Agreement Procedure (MAP), Finland and India have settled a long running tax dispute involving Nokia. The tax authorities in India issued a tax assessment to Nokia for violating withholding tax regulations in India while making royalty payments to its parent company in Finland. An additional assessment was then issued by the tax authorities in India to the parent company in Finland for the same transaction as – according to the tax authorities – the company had a permanent establishment in India. According to the MAP settlement Nokia will pay 102 million euro in addition to the 100 million euro already paid in India during 2013-2015 ... Continue to full case
Canada vs Sifto Canada Corp, March 2017, Tax Court, Case No TCC 37

Canada vs Sifto Canada Corp, March 2017, Tax Court, Case No TCC 37

The issue before the court was whether the Canadian revenue service had the ability to issue the second reassessments given the Canadian and US competent authorities subsequently agreed on a MAP settlement. The Tax Court found that a settlement agreed to via the competent authority precluded a subsequent tax-reassessment that attempted to further increase the taxpayer’s income. Canada vs Sifto Canada Corp, 2017 Case No TCC 37 ... Continue to full case
OECD's Manual on Effective Mutual Agreement Procedures (MEMAP)

OECD’s Manual on Effective Mutual Agreement Procedures (MEMAP)

The OECD Manual on Effective Mutual Agreement Procedures (MEMAP) is part of a broader project to improve the functioning of existing international tax dispute procedures and to develop supplementary dispute resolution mechanisms. More information about the project, the proposed supplementary dispute resolution mechanism, and other suggested improvements to the Mutual Agreement Procedures (MAP) process can be found at www.oecd.org under Dispute Resolution. The Manual is intended as a guide to increase awareness of the MAP process and how it should function. It will provide tax administrations and taxpayers with basic information on the operation of MAP and identify best practices for MAP without imposing a set of binding rules upon Member countries. The following points are important elements to consider in understanding the status of the manual and its interaction with other OECD guidance: The manual does not, and is not intended to, modify, restrict or expand any rights or obligations contained in the provision of any tax convention. Information ... Continue to full case