In an attempt to resolve global tax disputes, the Ministry of Finance (MoF) of the UAE published its guidance on the Mutual Agreement Procedure (MAP) in June 2025. MAP refers to the process of addressing all aspects involved in taxation disputes, including transfer pricing adjustments, for the UAE and other contracting states in Double Tax Agreements (DTAs).
In this guide, we are going to take a broader approach to understanding the mechanism of MAP, its salient features, functionality, eligibility, penalties, and everything in between to give you a clear understanding of how it works.
What is a MAP?
The MAP is the official procedure under the DTA that allows taxpayers to resolve global tax disputes related to different tax treatments between two jurisdictions, which could lead to double taxation. The main purpose of MAP is to offer taxpayers help by avoiding such double taxation by enabling negotiations and discussions among the Competent Authorities (CA) of the concerned nations.
The MoF has been assigned the role of CA that is responsible for negotiating, evaluating, and concluding MAPs in the UAE. The UAE CA works closely with the Federal Tax Authority (FTA), especially with regard to the incorporation of any MAP decisions implemented by it.
The goal is to eliminate double taxation by allocating taxing rights while also avoiding tax evasion. These DTAs would typically include a MAP clause, which acts as a treaty-based mechanism by which the contracting states to the DTA can resolve global tax disputes.
If the actions of one or both contracting states lead to taxation that is not in line with the DTA, the MAP can be called upon. Similarly, if there are any doubts and difficulties related to the application or interpretation of a DTA, then a MAP can also be called upon. If there are any cases that are otherwise not mentioned under the DTA, contracting states can consult under a MAP to prevent double taxation.
Need for MAP in the UAE
MAP is crucial for maintaining a healthy legal and economic climate in the UAE, as it offers relief in the event of economic double taxation. Additionally, it also provides help in cases where automatic relief, such as tax exemptions and tax credits, among others, are not readily available.
The tax treaty may allow interest arising in one specific contracting state and paid to and owned by a resident of the other contracting state to be taxed in both these states. The tax charged in the source state is limited to a previously agreed-upon rate.
Double taxation is then removed by the relief from double taxation article, by which the residence state would typically permit a credit deduction against its tax.
Eligibility for MAP
New changes to MAP are in line with the many new UAE laws and legal reforms to create a better society and aid the residents and citizens to lead a healthy and transparent life.
According to the MAP Guide, UAE DTAs enable taxpayers to make a MAP request to the CA of both contracting states, whilst the older DTAs usually need the taxpayer to get in touch with the CA of the contracting state in which they are tax resident.
A person may file a MAP request, where it is considered that the actions of either or both of the contracting states lead or will lead to taxation not per the DTA. Here is a non-exhaustive list of instances provided in the MAP Guide.
- Transfer pricing adjustments (including those self-initiated under the domestic laws of the UAE).
- Double taxation of permanent establishment and related profit attributions.
- Application of local general anti-avoidance rules and potential dispute with DTA provisions.
- Determination of tax residency.
Time Limit
Recently concluded UAE DTAs generally showcase the wording of the Model Tax Convention (MTC) of the Organisation for Economic Co-operation and Development (OECD) with regard to the time limits for filing a request for a MAP.
Cases must be presented within the span of a maximum of three years from the first notification of the action leading to taxation, not per a DTA. With that being said, a taxpayer must always take into consideration the specific time limits as imposed under the concerned DTA.
Domestic Remedies
A taxpayer cannot pursue domestic legal remedies and a MAP simultaneously. But to prevent a remedy of a taxpayer under either one expiring, a MAP claim can be presented (while the domestic remedies are still available). Please note that in this case, the taxpayer must agree to the suspension of the domestic remedies pending the claim of the MAP.
After the conclusion of the MAP claim, the taxpayer can then pursue domestic legal remedies (should the MAP result be disputed). Otherwise, MoF is also equipped to postpone the MAP claim until the domestic legal remedies of the taxpayer are dealt with.
Domestic Rulings
In an event where an ultimate ruling is issued by the Tax Dispute Resolution Committee or a domestic court in the UAE, the MoF is legally bound by such a decision.
Although MAP may still be accessible to the taxpayer in these cases, the scope of the MoF’s assistance will be limited, and any relief sought by the taxpayer can only be available from the other contracting state.
How to File a MAP Claim?
A formal MAP claim submitted to the UAE CA must include the following information, among others.
- Details of foreign tax administration.
- Identification of the taxpayer and associated elements.
- The treaty article(s) allegedly misapplied, and the interpretation of the application of the article by the taxpayer.
- Complete details of the transactions or assessments in discourse.
- Schedule of time limits (both under DTA and domestic laws) in respect of years for which relief is sought.
- Fiscal periods involved and relevant actions or facts taken by tax authorities.
- A summary of the analysis and facts of the issues for which UAE CA assistance is filed, including any issue raised by the tax administrations affecting the taxpayer and the concerned amounts.
- Whether domestic remedies have been raised in either of the CAs.
- Supporting documentation, such as prior tax rulings, tax residency certificates (for residency disputes), transfer pricing documentation, tax assessments, clarifications or advanced pricing agreements issued by the FTA and correspondence with other tax officials.
- Whether a prior submission has been made to any of the CAs related to the same issue
- Settlement agreements previously concluded with foreign CAs.
- The views of the taxpayer on possible bases to resolve issues under consideration.
Please note that the aforementioned list is not exhaustive, and assistance must be taken from the MAP Guide as applied to the specific subject matter of the MAP. Claims must be submitted in Arabic or English, with accompanying translations as requested.
For MAP requests requiring multi-year resolution, one request may be submitted, given that for each relevant year, the circumstances and facts of the issue are the same, and the request for MAP is submitted within the DTA’s specified timeline.
Penalties Related to MAP
If the resolution alters the tax position, then penalties directly associated with the issue covered under MAP may be adjusted. In addition, penalties for domestic compliance violations (such as failure to maintain the documentation for transfer pricing) are not included in MAP and remain enforceable.
Furthermore, it is usually required by taxpayers to pay the assessed tax during the MAP procedure. Adjustments or refunds are made only if the MAP results in a reduction in tax liability.
Key Takeaways
The UAE MAP Guidance offers further clarity on the process available to taxpayers for global tax discourses arising from DTAs. Taxpayers will need to do the following.
- Take into consideration the interaction of domestic remedies that are available under the MAP process.
- Evaluate whether they are subject to double taxation and refer to the relevant DTA with specific regard to the time limits within which to request a MAP claim.
- Respond to the UAE CA within a month and maintain transparency in all communications.
- Perform a thorough fact-finding exercise and retain any concerned records to safeguard their MAP claim as well as the ability of the UAE CA to help in seeking a resolution.
- Establish internal protocols to track the eligibility timelines of MAP (3-year rule).
- Take into consideration parallel filing to both CA in tax disputes to expedite resolution.
- Actively review intercompany arrangements likely to be challenged and ensure tax documentation is defensible and updated for current and prior tax years.
- Taxpayers must assess the bilateral MAP provisions in each DTA for procedural nuances, particularly where arbitration is allowed as a secondary relief.
- UAE taxpayers must include MAP considerations as part of their wider tax risk governance framework, specifically in high-risk areas such as centralised services, intellectual property, and intercompany financing.
To Conclude
Understanding the nuances of MAP can be a bit intimidating and overwhelming. This is why our expert tax team at our law firm in the UAE can aid you in better understanding the process of the UAE MAP and offer you customised support with drafting MAP submissions, evaluating your eligibility, and assisting you throughout the entire MAP process.