Mutual Agreement Procedure

Mutual Agreement Procedure (MAP) – is the procedure carried out within the framework of international treaties that is applied in consultation by the competent authorities regarding the interpretation and application of the provisions of the Tax Treaties or the Convention on the elimination of double taxation in connection with the adjustment of profits of associated enterprises (Arbitration Convention) when a taxpayer is taxed (or will be taxed) outside the scope of the provisions of the Tax Treaties or the Convention in order to deal with the issue of the elimination of double taxation.

Competent Authority (Institution) – State Tax Inspectorate under the Ministry of Finance of the Republic of Lithuania.
Permanent Working Group for handling Double Taxation Dispute Resolution Procedures is responsible for handling all MAP cases.
Contact person for questions related to double taxation dispute resolution procedures is:
Ms. Vaide Riskute, Head of Permanent working group for Double Taxation Dispute Resolution Procedures
Contact details: Tel. +370 5 2687 847, e- mail:  Vaide.Riskute@vmi.lt

MAP request should be made to State Tax Inspectorate under the Ministry of Finance of the Republic of Lithuania.

Address: Vasario 16-osios str. 14, Vilnius, Lithuania; e-mail address: MAP@vmi.lt

MAP request can be submitted on the basis of:

-       Article "Mutual Agreement Procedure" of the Tax Treaty concluded with a particular country,

-       Arbitration Convention,

-       Law on Double Taxation Dispute Resolution of the Republic of Lithuania which transposes Council Directive (EU) 2017/1852 of 10 October 2017 on tax dispute resolution mechanisms in the European Union.

When a MAP request is submitted according to the provisions of the Tax Treaty or Arbitration Convention, The rules for the initiation and execution of the MAP should be followed (MAP_Rules_EN_2019). In these rules taxpayers can find information on when to apply for the initiation of the MAP, time limits for submitting the MAP request, the specific information and documentation that should be submitted in the taxpayer's MAP request, and other information related to the initiation and execution of the MAP.

When a taxpayer wants to initiate a MAP according to the Law on Double Taxation Dispute Resolution (the Directive (EU) 2017/1852), the requirements for MAP request (complaint) are embedded in the Rules for implementation of Articles 3(3), 4(6), 15(2) of the Law on Double Taxation Dispute Resolution (Law on Double Taxation Dispute Resolution of the Republic of Lithuania).

Advance Pricing Arrangement (APA)

In order to avoid double taxation due to the possible actions by the tax administrator of another state in the context of the future controlled transaction, it is advisable to apply with the request regarding the alignment of the principles of pricing of future controlled transactions and conclusion of the agreement with the competent authority  of another foreign state, following the provisions of the relevant Tax Treaty between the Republic of Lithuania and another state for the avoidance of double taxation of income and capital. Upon submission of the request the mutual agreement procedure may be initiated in accordance with the procedure laid down in the legal acts.

APA rules: APA rules

APA request should be made to State Tax Inspectorate under the Ministry of Finance of the Republic of Lithuania.

Contact person for questions related to APA is Ms. Vaide Riskute, Head of Permanent Working Group for handling Advance Pricing Arrangements (contact details are provided above).

Links

OECD:
 http://www.oecd.org/tax/dispute/
 http://www.oecd.org/tax/treaties/

EU:
https://ec.europa.eu/taxation_customs/business/company-tax/transfer-pricing-eu-context/joint-transfer-pricing-forum_en
https://ec.europa.eu/taxation_customs/business/company-tax/resolution-double-taxation-disputes_en_en