UK Updates Mutual Agreement Procedure Guidance

; posted on
February 22nd, 2018

Her Majesty's Revenue and Customs (HMRC) published the Statement of Practice 1 (2018) to supersede the Statement of Practice 1 (2011). The new statement outlines the mutual agreement procedure (MAP) process and the use of MAP under the relevant UK Double Taxation Agreements and/or the EU Arbitration Convention (EUAC). It also outlines the UK’s approach to the role of arbitration as part of the MAP process.

MAP in the UK

MAP can be relied on by tax payers when tax consequence caused by either contracting state under a bilateral tax treaty is thought to fail to keep in accordance with the treaty, and there are no administrative or statutory dispute resolution processes in the UK that limit access to MAP. The process for concluding a MAP and arbitration issues are provided in detail. Where a solution or mutual agreement is reached under the terms of a UK Tax Treaty, it will be given effect despite anything in any enactment.

UK’s Response to BEPS Action 14

The UK has made efforts to strengthen the efficiency and effectiveness of the dispute resolution process and minimise incidences of unintended double taxation in light of recent experience and Action 14 ‘Making Dispute Resolution More Effective’ of the Base Erosion Profit Shifting (BEPS) project. The UK has committed to implementing the minimum standard in respect of preventing disputes, availability and access to MAP, resolution of MAP cases, and implementation of MAP agreements.

Source: UK Government

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