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India: Guidance for mutual agreement procedure (MAP)

India: Guidance for mutual agreement procedure (MAP)

The Central Board of Direct Taxes (CBDT) in August 2020 issued guidance concerning the mutual agreement procedure (MAP) that contains the following four parts:

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  • Introduction and basic information
  • Access and denial of access to MAP
  • Technical issues
  • Implementation of MAP outcomes

The MAP article in India’s income tax treaties is based on Article 25 of the OECD Model Tax Convention. A MAP request can be made by a taxpayer when it considers the actions of the tax authorities of one or both of the treaty partners results or will result in taxation not in accordance with the relevant tax treaty. Through this process, the competent authorities of the contracting states may resolve differences or difficulties regarding the interpretation or application of the tax treaties on a mutually agreed basis.

While the MAP is important to the proper application and interpretation of tax treaties, it has emerged as a widely used mechanism for resolving transfer pricing disputes.

Read an August 2020 report [PDF 381 KB] prepared by the KPMG member firm in India

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