HMRC has published a new Statement of Practice about the use of MAP - the process by which a tax resident from one country can ask their tax authority to enter into discussions with their counterpart if they believe they are not being taxed in accordance with the relevant double tax treaty.
The new SoP, which replaces the 2011 version, is supported by HMRC’s guidance in their International Manual at INTM 423000 and while it is in many ways a complete rewrite of the previous SoP, this does not amount to any significant changes in the way the MAP process works in the UK. The new statement is however clearly written to be aligned with the requirements of BEPS Action 14 Report (Making Dispute Mechanisms More Effective) and to demonstrate how the UK meets the minimum standard agreed in that report. As such the SoP provides a more practical guide as to how to make an application under MAP, including the European Arbitration Convention, rather than providing extensive background on the procedure.
It is worth noting that the new SoP includes clarity and confirmation of points that have previously been regarded as acceptable.
For example, ‘making separate requests’. Taxpayers have always been encouraged to make separate requests where an adjustment affects related parties in two jurisdictions - the guidance now formally specifies this.