Transfer pricing

3 How MAP - 3.2 Acceptability of a MAP request


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3 How MAP works

3.2. Acceptability of a MAP request

While the suggested general format of a MAP request (above) may seem extensive, competent authorities normally seek the following key elements in considering a MAP request:

  • there is an applicable tax convention covering the issue or transaction;
  • the person considers that the actions of one or both countries results or will result in taxation not in accordance with the provisions of the tax convention;
  • the competent authority is notified within the time limits specified in the applicable tax convention; and
  • the issue or objection seems to be justified.

Assuming those requirements are met, taxpayers are entitled to initiate a competent authority request even before an audit is completed or they have received formal notification of an assessment. Often, however, competent authorities require that an adjustment to income or issue be confirmed by the conclusion of the audit and a complete request be submitted before committing resources to the analysis or evaluation of a MAP process.  This may be particularly true where the competent authority feels unable to evaluate the case before the audit function has completed the factual development and related analysis. Although this may delay the work by a competent authority on processing an individual MAP case, it should not prevent notification or presentation of a case to a competent authority or in any way obstruct a person’s access to MAP.

Best Practice N° 7:   Allowing early resolution of cases

MAP application process that is capable of being initiated at an early stage of a potential dispute, perhaps in conjunction with a flexible initial review process, may allow the competent authority to help in the identification of pragmatic alternatives that may become apparent before either the tax administration or the taxpayer becomes overly burdened with unnecessary costs or excessive preparation of a case.

Notwithstanding the obvious benefits of an early resolution, many competent authorities prefer to limit their early involvement (prior to the conclusion of the audit), giving due consideration to maintaining a level of independence as outlined in Best Practice Nº23: Independence and funding of a competent authority, to making suggestions that relate to general policy and process issues, rather than discussing the specific details of a case which their office may be required to review in the future.  For example, these suggestions could address issues regarding the general viability of an adjustment as it relates to time limitations or proposals for an Advance Pricing Arrangement (APA) or simultaneous audit


It is advisable that taxpayers review the specific country’s guidance on MAP and the relevant convention for further details or consult with the competent authority directly.

It is common for competent authorities to notify taxpayers in writing whether their request for competent authority assistance has been accepted or declined within a reasonable period of time (30 days is suggested as reasonable).  Where a request is declined, it is constructive for the tax administrations to provide reasons for the decision. 

In addition, where the decision to accept or deny a MAP request is borderline (for example, where there is a question as to whether notification/presentation of a case to the competent authority was made within the specified time limits of a convention), it is important that the competent authorities bear in mind the spirit and objectives of the convention and also that the MAP process is designed to be inclusive as opposed to limiting participation.  This is especially true in cases where the issue of “probability of taxation” arises or cases where time limits exclude a person from competent authority assistance.     

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