Malta Mutual Agreement Procedure guidelines

A MAP is a procedure that allows the Maltese Competent Authority or its designated representatives to communicate with their counterparts in other jurisdictions with the intent to resolve international tax disputes. A MAP is possible under the provisions of a tax treaty or the EU Arbitration Convention, and can involve matters such as double taxation, transfer pricing adjustments, attribution of profits to a permanent establishment, withholding taxes, treaty anti-abuse provisions or any other case where the taxation is not in accordance with the applicable treaty or convention.

A taxpayer who considers that the taxation in Malta or another jurisdiction is not in accordance with the relevant treaty or convention, may request a MAP by submitting a written request to the Maltese Competent Authority or the Competent Authority of the other jurisdiction, depending on the treaty or convention. Such a request is to be submitted within the time limit specified in the treaty or convention and may vary depending on the case. The taxpayer must also provide certain information for the MAP to be initiated. 

Once the Maltese Competent Authority receives the MAP request, it will determine if the request is justified and can be resolved without involving the other Competent Authority i.e. whether a unilateral solution may be provided. 

If a unilateral solution cannot be offered and the Competent Authority agrees with the MAP request, it will take up the matter with the foreign jurisdiction under the applicable convention.

The Maltese Competent Authority aims at completing a MAP process within 24 months during which the Competent Authority is in touch through various forms of communication. A position paper is prepared and sent to the other Competent Authority within 180 days unless circumstances prevent it. The negotiation is a government-to-government process however, the taxpayer may be allowed to present factual information in exceptional cases.

When the Competent Authorities resolve a MAP the Malta Competent Authority will communicate the terms of the resolution to the taxpayer. If the taxpayer accepts the resolution, the Maltese Competent Authority will exchange letters with the other Competent Authority and give effect to the resolution in Malta. If the taxpayer does not accept the resolution, the taxpayer may withdraw from the MAP and pursue any available right to appeal.