The Ministry of Finance (MoF) of the United Arab Emirates (UAE) has published guidance on the mutual agreement procedure (MAP), which provides a dispute resolution procedure to resolve tax treaty related disputes.

MAP is designed to relieve double taxation, typically arising from transfer pricing cases and resolve treaty-related tax disputes and issues in interpreting or applying a tax treaty. Generally, MAP provides a bilateral mechanism for MoF to engage with the competent authority of another Contracting State.

Making a MAP Application in UAE

Consideration of a MAP request, MAP requests will only be accepted if:

  • The issue or transaction relates to a jurisdiction with which UAE has a DTA;
  • It is apparent that the actions of one or both jurisdictions resulted IN or will result in taxation not in accordance with the DT; and
  • The taxpayer notifies MoF within the time limits specified in the applicable DTA.

Therefore, any person that is a resident of UAE, or of another country (depending of the wording in the MAP article of the relevant tax treaty) as defined in the double tax treaty which applies to the case, and that considers that the actions of UAE and/or of the other Contracting State lead or may lead for him in taxation not in accordance with the provisions of such double tax treaty, may irrespective of the remedies provided by UAE’s legislation or the domestic law of the other Contracting State, present his case to MoF.

In cases where an adjustment is made that affects associated enterprises resident in different Contracting States, it is advisable that each of those enterprises submits a request for initiating a MAP to the competent authority of the State of which it is a resident.

The MAP Process

Steps of a MAP request:

  1. The taxpayer submits a MAP request;
  2. MOF will consider the request and ask the taxpayer for further information in writing, if required;
  3. Initiating a MAP consultation between UAE and its treaty partner;
  4. Agreement reached between UAE and its treaty partner;
  5. Implementation of mutual agreement reached.