CBDT issues MAP Guidance for benefit of Taxpayers, Tax Practitioners, Tax Authorities and CAs of India and of Treaty Partners

The Central Board of Direct Taxes (CBDT) issued the detailed Mutual Agreement Procedure (MAP) Guidance for the benefit of stakeholders including all the taxpayers, tax practitioners, tax authorities, and CAs of India and of treaty partners.

The Mutual Agreement Procedure (MAP) is an alternate tax dispute resolution mechanism available to the taxpayers under the Double Taxation Avoidance Agreements (DTAAs) for resolving disputes giving rise to double taxation or taxation, not in accordance with DTAAs.

The MAP guidelines are presented in four parts namely, introduction and basic; access and denial of access to MAP; technical issues; and implementation of MAP outcomes.

Recently notified Rule 44G applicable with effect from 6th May 2020 substitutes provides, inter-alia, the processes to be followed by the CAs of India till the resolution of the issue of taxation not in accordance with the treaty and the processes to be followed by the field authorities to implement the outcome of the MAP.

“Though erstwhile rules 44G and 44H were in existence for a number of years, detailed information regarding MAP processes and guidance on issues related to such processes were not available in a comprehensive and consolidated manner. The Action 14 final report on “Making Dispute Resolution More Effective”, of the Base Erosion and Profit Shifting (‘BEPS’, hereinafter) project of the G-20 and OECD countries, had recommended that all countries that implement the BEPS package of measures must publish comprehensive MAP guidance,” the guidelines said.

The Board has decided to issue this MAP guidance for the benefit of taxpayers, tax practitioners, tax authorities, and CAs of India and of treaty partners.