Transfer pricing (including MAP requests)

Mutual Agreement Procedures (MAP)

The MAP is a means through which competent authorities consult to resolve disputes regarding the application of double taxation conventions.

The MAP article in double taxation conventions allows competent authorities to interact with the intent to resolve international tax disputes. These disputes involve cases of double taxation where the same profits have been taxed in two jurisdictions.

The European Union (EU) Arbitration Convention establishes a procedure to resolve transfer pricing disputes for EU Member States. This procedure may be applicable where double taxation occurs between enterprises of different EU Member States.

The EU Council Directive on Tax Dispute Resolution Mechanisms in the European Union provides a means to resolve cross-border tax disputes. This is given effect in Ireland by S.I. No. 306/2019. The Regulations apply to disputes arising in respect of tax years commencing on or after 1 January 2018.

Ultimately, the objective of the MAP process is to both:

• negotiate an arm’s length position that is acceptable to both tax authorities
• and
• seek to avoid double taxation for taxpayers.

Mutual Agreement Procedures Guidelines (including Correlative Adjustments) provides information on the MAP process in Ireland.

Next: Advance Pricing Agreement (APA)