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13.4.3. APAs and Dispute Resolution Mechanisms

Mutual Agreement Procedure (MAP) is a procedure through which Competent Authorities consult and interact to resolve international tax disputes and to avoid double taxation arising from actions of one or both of the contracting states resulting in taxation that is not in accordance with the applicable double taxation convention. Generally, MAP is followed for transfer pricing cases, anti-abuse provision claims, and multilateral disputes and for multi-year resolution of cases.

The tax treaties entered into by Guernsey generally include Mutual Agreement Procedure (MAP) provisions. It provides the mechanism to resolve disputes related to the application of tax treaties by the competent authorities of respective jurisdictions. On 12 April 2019, the government published a simplified guide on the process to be followed by the taxpayers for making a request under the MAP provisions of the tax treaties. The guidance applies in cases where a taxpayer considers that they may not have been taxed in accordance with the provisions of a tax treaty. Further, on 17 November 2020, the tax authorities have published updated guidelines for the taxpayers providing details of circumstances, eligibility, and procedure for filing the MAP application, as also details of the MAP process and other related matters. The updated guidance also includes additional references to the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (MLI) and synthesized texts of tax treaties as modified by the MLI.