What is the mutual agreement procedure?

The mutual agreement procedure (MAP) (also known as the competent authority (CA) procedure (CAP)) is an administrative procedure meant to help resolve difficulties arising from:

1. •

   double taxation of taxpayers in a manner contrary to the provisions of the particular double tax treaty or convention (DTT), and

2. •

   the application and interpretation of DTTs

Article 25 of the Organisation for Economic Co-operation and Development (OECD) Model Tax Convention (OECD MTC) contains the general rules concerning the operation of the MAP between treaty partners. Countries can, however, amend Article 25 in their bilateral DTTs.

Article 25 was significantly modified in 2017 following the recommendations made in Action 14 (‘Making dispute resolutions mechanisms more efficient’) of the OECD’s Base Erosion and Profit Shifting (BEPS) project. The Action 14 report required countries (as a ‘minimum standard’) to include the provisions of Article 25(1)–(3) in their DTTs. These changes are implemented through the BEPS Multilateral Instrument (MLI). The MLI also contains provisions governing the arbitration of MAP cases where the CAs fail to resolve