IRD issues updated MAP Guidelines

Deloitte Malta Tax Alert

28 June 2019

The Commissioner for Revenue has updated guidance issued under the provisions of article 96(2) of the Income Tax Act, Chapter 123 of the Laws of Malta (the ‘ITA’) on the use of Mutual Agreement Procedure (‘MAP’).

The updated MAP Guidelines provide some additional clarifications to the previous version of the said guidelines, as follows:

i. A MAP is possible for bilateral and multilateral disputes and may deal with requests for the multi-year resolution of recurring issues.

ii. MAP may be resorted to in cases where:

  • a.      there is a bona fide foreign-initiated self-adjustment; and
  • b.      there is an audit settlement between another tax authority and a taxpayer

iii.       Once the Competent Authorities has resolved a MAP case, an exchange of letters between the Competent Authorities has occurred and the taxpayer has accepted the resolution, the Commissioner for Revenue shall give effect to the resolution in Malta without delay by (depending on the case):

  • a.      informing the taxpayer with immediate effect in order for the latter to submit the required Adjustment Form for the implementation of the MAP agreement; or
  • b.      by issuing a formal assessment that implements the MAP agreement (it is estimated that this process will take around 3 months from the agreement between the Competent Authorities and acceptance by the taxpayer).
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