In June 2025, the United Arab Emirates (UAE) Ministry of Finance issued its first official guide to the Mutual Agreement Procedure (MAP), a framework designed to resolve double taxation disputes arising from the application of bilateral tax treaties. Published in PDF format on its website, this guide consolidates the internal rules and criteria related to eligibility, terms, and obligations of both the taxpayer and the tax authorities during the process.
What Is the MAP and Its Scope in the UAE?
The MAP is a treaty-based mechanism (generally in Article 25 of the OECD Model Convention) that allows taxpayers to request the intervention of the competent tax authorities when they consider the taxation imposed is inconsistent with bilateral treaties, regardless of a direct local court’s ruling.
In this context, the UAE Ministry of Finance is the competent authority (UAE CA), while the Federal Tax Authority (FTA) is responsible for implementing adjustments after agreeing.
Reasons for Applying
Taxpayers can use the MAP when there are disputes like the following:
- Transfer Pricing adjustments without the corresponding deduction on the other side.
- Double tax residence.
- Conflicts over the attribution of profits from a permanent establishment.
- Issues relating to abuse of rules or treaty interpretation.
The deadline for filing a claim begins from the first notification of the disputed tax act, generally with a three-year limit. Conversely, taxpayers may file a claim proactively if they anticipate a divergence.
Procedure, Representation, and Required Documentation
The taxpayer files the request directly with the UAE CA, in English or Arabic, including:
- Summary of the facts and dispute.
- References to the applicable treaty.
- Transfer Pricing documentation.
- Tax residence certificates.
- Correspondence with foreign tax authorities, among others.
The UAE CA confirms admissibility within an estimated period of two months, after which it may attempt to resolve the case unilaterally. Otherwise, it initiates bilateral negotiations with the competent authority of the other country. Taxpayers do not directly participate in negotiations, but they may present technical arguments if invited.
Timeframes, Results, and Legal Effects
The guide establishes that, under reasonable conditions of cooperation, the UAE CA commits to resolving MAP cases within an estimated period of 24 months after acceptance. After agreeing, taxpayers have 30 days to accept or reject it. Acceptance means giving up any legal action locally, and the FTA will recognize and adjust, including any refunds.
If no agreements are reached, the process will end, and taxpayers will have to use internal legal options to defend their tax position.
Interaction with Local Remedies
Filing a claim before the MAP does not prevent initiating local legal actions (such as before the Tax Dispute Resolution Committee or courts) if those actions are temporarily suspended while the MAP is being processed. If there is already a local court decision, the UAE CA is legally bound to respect it.
Regulatory Context and Comparative Strategies
The UAE has over 100 active double taxation treaties, many of which have been updated through the Multilateral Instrument (MLI), strengthening its mutual agreement procedure. Adopting this guide coincides with the full implementation of Corporate Tax (CT) and the Transfer Pricing (TP) regime, which have been integrated since 2023, leading to an upward trend in international tax disputes related to price adjustments among related companies.
Conclusion
The MAP guide represents a decisive step toward strengthening legal certainty for taxpayers in the United Arab Emirates and aligns the country with the OECD international best practices. It provides a clear framework with defined timelines and specific roles for each actor, allowing companies to anticipate strategies in cross-border tax disputes. In an increasingly sophisticated regulatory environment, understanding the emerging MAP is a competitive advantage for multinationals operating from or to the UAE.
Fuente: MOF