Organization : South African Revenue Service – SARS
Head Quarters: Pretoria
Facility : Mutual Agreement Procedure
SARS Mutual Agreement Procedure – MAP
What is a MAP?
** MAP is a procedure which allows the Competent Authorities or designated representatives of the Competent Authorities from the governments of the Contracting States/Parties to interact with the intent to resolve international tax disputes.
Related :South African Revenue Service Tax Payment : www.southafricain.com/5877.html
** MAP is provided for in an Article in a Double Taxation Agreement (DTA) and can involve matters containing juridical double taxation cases, as well as inconsistencies in the interpretation or application of a DTA.
What is a Competent Authority?
** DTAs are usually concluded between the governments of two countries. These countries are then referred to as the Contracting States or Contracting Parties to such an agreement.
** “Competent Authority” is a term used in tax conventions or agreements to identify a position, a person or a body to whom issues can be addressed within a Contracting State.
** The Competent Authority in South Africa is the Commissioner for SARS and duties have been delegated to designated representatives in the Legislative Research & Development Subdivision within Legal & Policy.
What is the function of a Competent Authority?
** The Competent Authority in a Contracting State/Party is charged with the responsibility to interact with its counterparts in any matters arising between the different Contracting States/Parties pertaining to the interpretation or the application of a DTA, and to resolve any international tax disputes that might arise.
** A Competent Authority is generally committed to ensure a good faith application of a DTA. The Competent Authority endeavours to resolve requests from their counterparts in accordance with a particular DTA.
How does it work
** The DTA permits a mutual agreement procedure (MAP) for resolving difficulties arising from the application of a DTA in the broadest sense of the term.
** It basically authorises the Competent Authorities or their designated representatives to communicate with each other directly, including through joint commissions, for the purpose of resolving the matters that might be brought before them.
A MAP Request for Assistance may deal with any of the following subjects :
** Transfer pricing adjustment requests
** Attribution of profits of a permanent establishment
** Dual residence of individuals and persons other than individuals
** Withholding tax levied beyond what is permitted by the applicable DTA
** Any other case in which a person considers that the taxation is not in accordance with the applicable DTA
Depending on the relevant subject, the MAP request will be routed into one of two channels, i.e. :
Transfer Pricing MAP
or
Interpretation MAP
MAP Request for Assistance
** It is a request from one Competent Authority of a particular DTA’s Contracting State/Party, to the Competent Authority of the other Contracting State/Party, under a particular DTA, to resolve any international tax dispute.
Step 1 :
** In cases where the taxation which is not in accordance with the DTA has been imposed, the taxpayer must first raise the issue with the relevant State as agreement by the other State will negate the need for a MAP.
Read all about the South African procedures here :
** Request for Correction
** Objections
** Appeals
Step 2 :
** If unsuccessful, the taxpayer may then approach the Competent Authority of his/her country of residence to request a MAP under the relevant DTA.
** If the Competent Authority in the country of residence cannot itself resolve the matter, but is in agreement with the taxpayer’s request for a MAP, the Competent Authority will take up the matter with the Competent Authority of the other Contracting State/Party under the specific DTA.
** Country Profiles on Mutual Agreement Procedures (MAP) which contain information about the Competent Authorities’ contact details, domestic guidelines for MAP and other useful information for both tax authorities and taxpayers are available on the OECD website at .oecd.org/ctp/dispute/country-map-profiles.htm.
** South Africa’s MAP profile can be accessed at .oecd.org/tax/dispute/South-Africa-Dispute-Resolution-Profile.pdf.
What to submit & Where to submit it
** SARS, as the Competent Authority, requires certain minimum information to be included in a MAP Request, whether it is for a Transfer Pricing MAP Request or an Interpretation MAP Request.
** The types of MAP Requests, the minimum information required per type, and the relevant email address to be used per type, are set out in the table below.
Important Notes :
** MAP Requests should only be submitted to SARS after the South African resident taxpayer has, where applicable, first approached the foreign revenue authority to make that revenue authority aware that, in that taxpayer’s view, tax which is not in accordance with the provisions of the relevant DTA, has been levied by the foreign revenue authority
** If the matter cannot be resolved through that approach, then the South African resident taxpayer can approach the Competent Authority at SARS for assistance
** MAP Requests should contain all the minimum requirements stipulated for each type, and should be submitted to the correct email address to ensure that they reach the correct section.