MAP Mutual Communication Procedure

MAP procedure as an effective way to eliminate double taxation

Double taxation is one of the biggest challenges that companies operating within international capital structures can face. It can arise as a result of the adjustment of the tax base by the tax authorities in one of the countries in which the company operates. Such an adjustment often results in the need to pay tax in more than one jurisdiction, which leads to significant financial consequences for the capital group in which the company operates.

To prevent this, the Mutual Agreement Procedure (MAP) is used to resolve double taxation disputes between countries. MAP allows tax administrations to reach an agreement on the corrections made by the tax authorities and to avoid negative consequences for the taxpayer.

In our company, we offer comprehensive support in preparing and conducting the MAP procedure, ensuring clients are protected against the effects of double taxation and compliance with international regulations.

The scope of our service

As part of our service, we provide full support at every stage of the MAP procedure. Our activities include:

Choosing the right legal basis for the procedure

Analyzing the client's tax situation and identifying whether MAP is the best solution.
Assessment of national regulations and double taxation treaties (DTTs) that may constitute a basis for initiating MAP proceedings.
Consultation with the client regarding possible courses of action and the expected timetable for action.

Preparation of a detailed description of the actions of the parties to the transaction that resulted in double taxation

Analysis of the business circumstances and transactions subject to valuation by the tax authorities.
Determining which elements of the settlements led to double taxation.
Preparation of complete documentation in order to present reliable arguments before the tax administration.

Preparation of a description of the mechanism of double taxation

Identification of links between entities and analysis of how income is allocated between countries.
Verification of corrections made by tax authorities and determination of their impact on overall tax settlements.
Preparation of justification pointing out inconsistencies in tax approaches in different countries.

Preparation of a formal application to the Minister of Finance

Preparation of an application to initiate the MAP procedure together with attachments confirming the validity of the claims.
Verification of the completeness of the documentation and its adaptation to applicable regulations.
Submitting an application and monitoring its status.

Representing the client before the Ministry of Finance at every stage of the proceedings

Participation in meetings and negotiations with the tax administration on behalf of the client.
Representing taxpayer interests in explanatory proceedings.
Adapting the strategy to the current course of action.

Monitoring the course of the proceedings and adapting the application to changing requirements

Tracking regulatory updates and new interpretations that may affect the outcome of the proceedings.
Introducing possible changes to the tax argumentation.
Supporting the client in responding to questions and additional requests from the tax administration.

Benefits of our service

Thanks to comprehensive service in the field of the MAP procedure, our clients gain a number of significant benefits:

Elimination of double taxation

The MAP procedure leads to an agreement between the tax administrations of two countries, eliminating the need to pay tax in both jurisdictions.
It allows you to recover overpaid tax amounts or avoid having to pay them.
Reduces the tax burden associated with international activities.

Reduced risk of tax audit

Once MAP is obtained, the transaction is protected against further questioning of its settlement by the tax authorities.
Reducing the number of audit proceedings and tax disputes related to international transactions.
Increasing the transparency of settlements in the eyes of tax authorities.

Protection against tax sanctions

By using MAP it is possible to avoid additional sanctions and interest on tax arrears.
The procedure ensures the formal settlement of a tax dispute in a manner consistent with international standards.

Simplifying tax settlements in the future

Obtaining a MAP agreement provides a solid foundation for future tax settlements.
Ensuring compliance with transfer pricing and double taxation regulations.
Possibility of using the MAP procedure for similar situations in the future.

Greater legal and tax certainty for the company

The MAP procedure ensures a clear and binding position of the tax authorities regarding settlements.
Reducing the risk of differences in interpretation in individual countries.
Improving tax planning for international operations.

Why is it worth using our support?

The implementation of the MAP procedure requires knowledge of tax regulations in various jurisdictions, experience in negotiations with tax authorities and the ability to properly prepare tax arguments.

With our support you can count on:

Professional case analysis and assessment of the feasibility of using MAP
Preparation of a complete application in accordance with the requirements of the tax administration
Effective negotiations and representation before tax authorities
Monitoring regulatory changes and adapting tax strategy

Contact us!

If you would like to receive professional support in the MAP procedure, please contact us.

Izabela Wójcik
Director, Tax Advisor

Paweł Turek
Partner, Attorney-at-law, Tax Advisor