The UAE’s Ministry of Finance (MoF) recently released its Mutual Agreement Procedure (MAP) guide (June 2025) (the MAP Guide). The MAP Guide sets out the procedure by which taxpayers may resolve international tax disputes under the UAE’s network of Double Taxation Agreements (a DTA or DTAs). Below we briefly examine the salient points outlined in the guide.
What is a MAP?
Countries conclude DTAs with the aim of eliminating double taxation through the allocation of taxing rights while also preventing tax evasion. These DTAs would generally include a MAP clause which serves as a treaty based mechanism by which the contracting states to the DTA can resolve cross border tax disputes. A MAP can be invoked where the actions of one or both contracting states result (or will result) in taxation not in line with the DTA or where there is difficulty or doubts regarding the interpretation or application of a DTA. Contracting states are also able to consult under a MAP to eliminate double taxation in cases not otherwise provided for under the DTA.
In the UAE, the MoF has been designated as the competent authority (CA) responsible for evaluating, negotiating and concluding MAPs, provided this function is delegated to the International Tax Department within the Ministry’s Tax Policy Sector (the UAE CA). The UAE CA works closely with the Federal Tax Authority (FTA), especially with regard to the implementation of any MAP decisions reached by it.
In what follows, we briefly consider the eligibility criteria to lodge a MAP request, the process by which a MAP is lodged, how the MAP will be processed by the UAE CA and finally how the MAP decision is ultimately implemented.
Eligibility for MAP
Per the MAP Guide, UAE DTAs allow for the taxpayer to make a MAP request to the CA of either contracting state whilst the older DTAs (that have not been amended by the MLI) typically require the taxpayer to approach the CA of the contracting state in which they are tax resident.
Subject to the wording of the applicable DTA, a person (as defined in the relevant DTA) may lodge a MAP request, where it considers that the actions of one or both of the contracting states result (or will result) in taxation not in accordance with the DTA. A non-exhaustive list of examples provided in the MAP Guide include:
- transfer pricing adjustments (including those self-initiated under UAE domestic laws);
- determination of tax residency;
- double taxation of permanent establishment and associated profit attributions; and
- application of domestic general anti-avoidance rules and potential conflict with DTA provisions.
Time Limit
Recently concluded UAE DTAs typically reflect the wording of the OECD’s Model Tax Convention (the MTC) with regard to the time limits for submission of a MAP. Cases must be presented within three years from the first notification of the action resulting in taxation not in accordance with a DTA. Having said this, the taxpayer should always consider the particular time limits as imposed under the particular DTA.
Domestic Remedies
A taxpayer cannot simultaneously pursue MAP and domestic legal remedies. However, to avoid a taxpayer’s remedies under either one expiring, a MAP claim may be presented (while the domestic remedies are still available), subject to the taxpayer agreeing to the suspension of the domestic remedies pending the MAP claim. Upon conclusion of the MAP claim, the taxpayer will then be free to pursue domestic legal remedies (should the MAP outcome be disputed). Alternatively, MoF is also empowered to delay the MAP claim until the taxpayer’s domestic legal remedies are exhausted.
Domestic Rulings
In cases where a final ruling is issued by a UAE domestic court or by the Tax Dispute Resolution Committee, the MoF is legally bound by such decision. Although MAP may still accessible to the taxpayer in these instances, the MoF’s scope of assistance will be limited, and any relief sought by the taxpayer may only available from the other contracting state.
Filing a MAP Claim
A valid MAP claim submitted to the UAE CA should include the following information (among others):
- Identification of the taxpayer and related entities (especially in TP cases);
- Foreign tax administration details;
- Full details of the transactions or assessments in dispute;
- The treaty article(s) allegedly misapplied and the taxpayer’s interpretation of the application of the article;
- Fiscal periods involved and relevant facts or actions taken by tax authorities;
- A summary of the facts and analysis of the issues for which UAE CA assistance is requested, including any specific issues raised by the tax administrations affecting the taxpayer and the related amounts;
- Supporting documentation, such as transfer pricing documentation (for TP cases), tax assessments, tax residency certificates (for residency disputes), prior tax rulings, clarifications or advanced pricing agreements issued by the FTA and correspondence with other tax authorities;
- Whether a prior submission has been made to either of the CAs regarding the same issue;
- Whether domestic remedies have been initiated in either of the CAs;
- Schedule of time limits (both under domestic laws and DTA) in respect of years for which relief is sought;
- Settlement agreements previously concluded with foreign CAs; and
- Taxpayer’s views on possible bases to resolve issues under consideration.
The list set out above is not exhaustive and guidance should be taken from the MAP Guide as applied to the particular subject matter of the MAP. Claims must be submitted in English or Arabic, with accompanying translations as requested.
For MAP requests requiring multi-year resolution, one request may be submitted provided that for each relevant year, the facts and circumstances of the issue are the same and the MAP request is submitted within the timeline specified by the DTA.
MoF Review, Assessment and Outcome
Following receipt, the MoF will conduct an eligibility review and endeavour to respond to the taxpayer within two months regarding its decision to accept or reject the MAP claim.
Where a MAP claim is accepted and the objection is justified, the MoF will first assess whether it can provide unilateral relief. In the event that it cannot provide such relief, it will commence bilateral negotiations with a view on resolving the case through mutual agreement. Provided, MAPs can also be concluded on a multilateral basis, for example where a multilateral transfer pricing dispute impacts profit allocation across multiple states.
Where bilateral negotiations are carried out, the competent authorities of both states will exchange position papers on the matter and attempt to negotiate an agreement, with limited involvement of the taxpayer. The taxpayer will not be privy to negotiations and will be limited to providing its views and fact-finding, unless otherwise directed by the CAs.
Outcome
MoF will notify a taxpayer via e-mail within two months of the conclusion of any agreement between the competent authorities. The taxpayer must respond with an acceptance or rejection of the outcome within one month of such a notification.
If the taxpayer accepts a MAP agreement, they must:
- confirm in writing
- withdraw any domestic remedies filed
- renounce access to domestic remedies relating to the same issues and period covered by the MAP agreement
- submit a voluntary disclosure to the FTA, which will be submitted in parallel to the FTA’s implementation of any agreement reached under MAP
If the taxpayer rejects the MAP agreement:
- the MAP claim will be considered closed
- the taxpayer will be free to pursue or resume other available domestic remedies in the UAE or other jurisdiction if applicable
It may be possible that an agreement cannot be reached between the competent authorities, despite multiple rounds of negotiation. The taxpayer may continue to pursue domestic remedies in such a case (where applicable). If a DTA provides access to arbitration for an issue that is unresolved via MAP, the taxpayer may also be able to request arbitration under prescribed circumstances.
Penalties and Tax Payable
Any penalties levied in relation to a liability subject to MAP shall be adjusted in line with the DTA and any MAP agreement concluded. Where there is no resolution as a result of the MAP process, such penalties will continue to accrue. Note that where the penalty is imposed for breaching domestic provisions, these penalties cannot be waived or adjusted by the MoF and relief would need to be sought under the domestic provisions.
Tax
An ongoing MAP process does not suspend any taxes payable under an assessment issued by the FTA. If a taxpayer accepts a MAP agreement that waives or reduces the tax liability, any tax already paid by the taxpayer to the FTA will be refunded/credited pursuant to an application made by the taxpayer to the FTA. If no MAP agreement is reached, the tax liability will continue to accrue (absent any relief from domestic remedies).
Our Tax Services
Our Tax Team can assist you in better understanding the UAE MAP process and can provide you with tailored support with assessing your eligibility, drafting MAP submissions and guiding you through the MAP process.
Hadef and Partners provide clients with specialist tax advice, planning and implementation support to achieve optimal tax outcomes for their business and personal interests in the UAE. Should you require support, please contact Theunis Claassen, our Head of Tax, to arrange an initial discussion.