Mutual Agreement Procedures (MAPs) of tax treaties

  • The Government proposes to disclose the number of disputes being negotiated under the Mutual Agreement Procedures (MAPs) of tax treaties along with the time being taken to resolve such disputes. Action 14 of the Base Erosion and Profit Shifting (BEPS) project of the G-20/OECD countries, which seeks to make dispute resolution mechanisms more effective, mandates that all participating countries shall provide details pertaining to tax disputes being negotiated under the Mutual Agreement Procedure (MAP) Article of tax treaties.
  • The details are to be provided in agreed upon templates to capture information about inventory of cases and outcomes of cases. Such details would include the number of cases pending under MAP, number of cases resolved fully to eliminate double taxation, number of cases that could not be resolved, etc.
  • Disclosure of such information is expected to bring about more transparency in the working of competent authorities of all participating countries and would perhaps result in quicker resolution of double taxation problems faced by taxpayers across the globe.

About Base Erosion and Profit Shifting:

  • Base erosion and profit shifting (BEPS) refers to tax avoidance strategies that exploit gaps and mismatches in tax rules to artificially shift profits to low or no-tax locations.
  • Under the inclusive framework, over 100 countries and jurisdictions are collaborating to implement the BEPS measures and tackle BEPS.

Base profit:

  • The difference between sales revenue generated by a specific product or service and the cost to produce or provide the product or service.


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