Mutual Agreement Procedure
Mutual Agreement Procedure
Mutual Agreement Procedure (MAP) is applied within the framework of international tax treaties and double taxation avoidance agreements by competent authorities for the purpose of international tax dispute resolution. In following the interpretation and application of the respective tax treaty and double taxation avoidance agreement provisions, and in connection with profit adjustments of associated enterprises (Arbitration Convention), competent authorities may eliminate double taxation in cases where the taxpayer is taxed (or is to be taxed) outside the scope of the provisions of the respective tax treaty or double taxation avoidance agreement.
Competent Authority (Institution) refers to the State Tax Inspectorate under the Ministry of Finance of the Republic of Lithuania.
Permanent Working Group on Double Taxation Dispute Resolution Procedures refers to persons responsible for handling all MAP cases.
For questions concerning double taxation dispute settlement procedures, please refer to the contact person:
Vaide Riskute, Head of Permanent Working Group on Double Taxation Dispute Resolution Procedures
Phone: +370 5 2687 847, e-mail: [email protected]
Requests (complaints) regarding the initiation of double taxation dispute settlement procedures are to be submitted to the State Tax Inspectorate under the Ministry of Finance of the Republic of Lithuania, at the following address: 14, Vasario 16-osios Str., Vilnius; or e-mail address: [email protected].
MAP requests may be submitted on the basis of either of the following:
- Article Mutual Agreement Procedure of the respective tax treaty concluded with the respective country,
- Arbitration Convention,
- Republic of Lithuania Law on Double Taxation Dispute Resolution, transposing Council Directive (EU) 2017/1852 of 10 October 2017 on Tax Dispute Resolution Mechanisms in the European Union.
When MAP requests are made under the provisions of the respective tax treaty or arbitration convention, MAP rules are to be followed. These rules provide taxpayers with information on when to apply for the initiation of a MAP case, the due dates for the submission of a MAP request, the specific information and documents to be included in the MAP request of the taxpayer, and other information related to the initiation and implementation of a MAP case.
When taxpayers wish to initiate a MAP case under the Law on the Settlement of Disputes on Avoidance of Double Taxation (Directive (EU) 2017/1852), the requirements for the MAP request/complaint are set out in the Rules for the Implementation of Articles 3(3), 4(6), 15(2) of the Law on Double Taxation Dispute Resolution (Republic of Lithuania Law on Double Taxation Dispute Resolution).
Advance Pricing Arrangement (APA)
In order to avoid double taxation due to possible actions of the tax administration of another state in relation to a future controlled transaction, the following is recommended: to apply for the harmonization of pricing principles for future controlled transactions and conclusion of a treaty with the competent authority of another foreign state, in accordance with the provisions of the respective treaty between the Republic of Lithuania and the foreign state on the avoidance of double taxation of income and capital. Upon submission of the above request, the mutual agreement procedure may be initiated in accordance with the procedure established by law.
Please refer to the APA rules.
APA requests are to be submitted to State Tax Inspectorate under the Ministry of Finance of the Republic of Lithuania.
For questions concerning APA, please refer to the contact person: Vaide Riskute, Head of Permanent Working Group on Advance Pricing Arrangements (please refer to the above contact information).
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