UAE Issues New Guidance on Double Taxation Relief Process
UAE issues new guidance on double taxation relief process. The Ministry of Finance has shared new and clear rules about the Mutual Agreement Procedure (MAP). These rules help both the businesses as well as individuals who want to avoid paying tax two times on the same income under international tax agreements.
MAP is an official process which helps UAE taxpayers efficiently solve the tax related problems with other countries. It is mainly used when there are issues like transfer pricing changes or when there is a disagreement about whether a business has a permanent establishment in another country.
Key Highlights of MAP Guidance
- Eligibility and Timelines: Taxpayers usually have up to three years from the time they find out about possible double taxation to apply for the MAP process.
- Required Documents: The new guidelines clearly explain what documents and details are required to make a proper MAP request.
- Legal Limitations: When a decision has already been made by the UAE court or Tax Dispute Resolution Committee, it might reduce the options available or limit the support you can receive through MAP process.
- Resolution Timeline: The UAE tax authority tries to settle MAP cases within the time limits suggested by the OECD. How fast the case is resolved depends on how well the other country’s tax authority cooperates and how quickly the taxpayer provides the needed information.
The Ministry of Finance highlighted that the wide network of the UAE tax agreements makes the MAP process very useful for companies that are working in more than one countries. The new rules help taxpayers determine if they can use MAP and which country they need to send their request to. This means that the Ministry wants to be open and fair about taxes and follow international rules. It also makes it easier for businesses to fix tax problems with other countries.
