…. (including threats of penalties or commencement of criminal proceedings to deter pursuit of MAP) but notes that progress has been made in many countries to address this issue.
Chapter 3: bilateral discussions and MAP arbitration (bilateral phase)
When tax authorities cannot resolve a dispute unilaterally, they enter bilateral negotiations. This typically involves three steps:
exchanging position papers and holding discussions;
finalising and implementing any agreement reached; and
if no agreement is reached, the taxpayer may request arbitration (where the treaty allows).
The guidance emphasises that meetings should be collaborative, pragmatic and focused on finding solutions. In particular, competent authorities should not be attempting to re-audit any positions but rather verifying whether a resulting adjustment or assessment aligns with the relevant tax treaty, only seeking factual clarifications where needed.
Table appearance example:-
Good faith engagement with the MAP (MEMAP Best Practice Nº18)
Timely submission of MAP requests (MEMAP Best Practice Nº22)
Clear and simple format for MAP requests (MEMAP Best Practice Nº24)
Actively cooperate, provide information promptly, and submit MAP requests in a timely manner after reviewing published guidance.
Clearly mark protective requests, act consistently with chosen remedies, and accept agreements that fully resolve treaty-inconsistent taxation.
Submit MAP requests as soon as possible after receiving notification rather than waiting until filing deadlines.
Provide all necessary information and translations upfront in complex cases to enable faster resolution.
Provide required information in a MAP request in a simple and understandable format, with clear main text and supporting annexes to avoid processing delays.
Include Executive Summaries for complex cases and provide translations in English (or another mutually agreed language) where authorities do not share a common language.
Protective MAP requests (MEMAP Best Practice Nº25)
Timely responses during MAP process (MEMAP Best Practice Nº36)
Availability for communications (MEMAP Best Practice Nº45)
Clearly mark requests as protective to preserve time limits without triggering substantive examination until expressly requested.
Avoid requesting MAP suspension after substantive discussions begin to pursue domestic remedies.
Provide timely and complete responses to requests for additional information.
Ensure both competent authorities receive identical details simultaneously.
Remain available for communications, calls, and meetings throughout the MAP process.
This cooperative approach enables clarifications and prevents delays in case resolution.
Responding to provisional MAP agreements (MEMAP Best Practice Nº49)
Arbitration (MEMAP Best Practice Nº54)
Providing MAP requests to both jurisdictions (MEMAP Best Practice Nº23)
Confirm agreement or disagreement within specified timeframes, provide any reasonable information request, and withdraw/waive domestic remedies to allow implementation.
Cases may be closed if consent and withdrawals are not obtained despite reasonable follow-up.
Assess whether to continue productive MAP discussions beyond arbitration deadlines or proceed to arbitration.
Weigh the time and effort required for arbitration against the likelihood of achieving resolution through continued discussions.
Submit MAP requests to both jurisdictions concerned, either formally or by having only one MAP request submitted formally to the competent authority of the taxpayer’s state of residence as required under the treaty, while providing a copy to the other.
Include checklists that demonstrate how the information provided corresponds to the information requirements in both jurisdictions.
end
Table appearance example:-
Good faith engagement with the MAP (MEMAP Best Practice Nº18)
Timely submission of MAP requests (MEMAP Best Practice Nº22)
Clear and simple format for MAP requests (MEMAP Best Practice Nº24)
Actively cooperate, provide information promptly, and submit MAP requests in a timely manner after reviewing published guidance.
Clearly mark protective requests, act consistently with chosen remedies, and accept agreements that fully resolve treaty-inconsistent taxation.
Submit MAP requests as soon as possible after receiving notification rather than waiting until filing deadlines.
Provide all necessary information and translations upfront in complex cases to enable faster resolution.
Provide required information in a MAP request in a simple and understandable format, with clear main text and supporting annexes to avoid processing delays.
Include Executive Summaries for complex cases and provide translations in English (or another mutually agreed language) where authorities do not share a common language.
Protective MAP requests (MEMAP Best Practice Nº25)
Timely responses during MAP process (MEMAP Best Practice Nº36)
Availability for communications (MEMAP Best Practice Nº45)
Clearly mark requests as protective to preserve time limits without triggering substantive examination until expressly requested.
Avoid requesting MAP suspension after substantive discussions begin to pursue domestic remedies.
Provide timely and complete responses to requests for additional information.
Ensure both competent authorities receive identical details simultaneously.
Remain available for communications, calls, and meetings throughout the MAP process.
This cooperative approach enables clarifications and prevents delays in case resolution.
Responding to provisional MAP agreements (MEMAP Best Practice Nº49)
Arbitration (MEMAP Best Practice Nº54)
Providing MAP requests to both jurisdictions (MEMAP Best Practice Nº23)
Confirm agreement or disagreement within specified timeframes, provide any reasonable information request, and withdraw/waive domestic remedies to allow implementation.
Cases may be closed if consent and withdrawals are not obtained despite reasonable follow-up.
Assess whether to continue productive MAP discussions beyond arbitration deadlines or proceed to arbitration.
Weigh the time and effort required for arbitration against the likelihood of achieving resolution through continued discussions.
Submit MAP requests to both jurisdictions concerned, either formally or by having only one MAP request submitted formally to the competent authority of the taxpayer’s state of residence as required under the treaty, while providing a copy to the other.
Include checklists that demonstrate how the information provided corresponds to the information requirements in both jurisdictions.
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