Mutual Agreement Procedure (MAP) Guidance Note

Summary

This is a guidance note issued by the BVI International Tax Authority (ITA) explaining how the Mutual Agreement Procedure (MAP) works under the BVI's double taxation agreements (DTAs). MAP allows a taxpayer who believes they have been taxed inconsistently with a DTA to ask the ITA, as the BVI's Competent Authority, to negotiate a resolution with the treaty partner's competent authority. The note sets out who can apply, what a request must contain, and the timeframes both the ITA and the taxpayer must follow at each stage of the process.

• Who can apply: Any BVI resident taxpayer who believes taxation has not been applied in accordance with a DTA containing a MAP article may request MAP assistance, including transfer pricing cases, anti-abuse provision disputes, and bona fide foreign-initiated self-adjustments.
• Where and how to apply: Requests must be made in writing to the Director of the International Tax Authority and must include specified minimum information (identity and tax references of parties, facts, legal analysis, relevant DTA article, taxation period, and disclosure of parallel proceedings).
• Processing steps: The ITA notifies the taxpayer and the foreign competent authority of receipt, may request further information, determines eligibility, negotiates with the treaty partner, and then communicates any agreement reached to the taxpayer, who must decide whether to accept it.
• Timeframes: Specific deadlines apply to each step (notification, information requests, eligibility decisions, consultation, and implementation), with an overall target of resolving cases within an average of two years, extendable by mutual agreement.
• Withdrawal and costs: A taxpayer may withdraw a MAP request in writing at any time, and the ITA charges no fee for handling a MAP request.

The guidance is procedural rather than binding legislation, but it creates concrete time limits for both the ITA and taxpayers once a MAP request is made, and clarifies that access to MAP will not be unreasonably withheld even where a DTA lacks an equivalent consultative provision.

Key obligations

• A taxpayer must notify the competent authority of a MAP issue within the time limits specified in the applicable DTA.
• MAP requests must be submitted in writing to the Director of the International Tax Authority and must include the specified minimum information (taxpayer identity, tax references, facts, legal analysis, relevant DTA article, taxation period, and disclosure of related proceedings).
• For transfer pricing cases, the taxpayer must provide the name, address and (if possible) taxpayer identification number of related foreign taxpayers and copies of relevant documentation.
• The taxpayer must confirm in writing that all information provided is accurate and commit to providing further information promptly when requested.
• If the ITA requests further information, the taxpayer must provide it within 10 days, not to exceed 30 days, of receiving the request.
• Once notified of a mutual agreement, the taxpayer must respond to the ITA in writing within 30 days indicating whether the agreed outcome is accepted.
• A taxpayer who wishes to withdraw a MAP request must notify the ITA in writing as soon as possible after making that decision.
• MAP cases not in accordance with the Convention should be presented within a period of no less than three years from the first notification of the action resulting in taxation, per the applicable DTA.

Applies to

BVI resident taxpayers, taxpayers party to a double taxation agreement with the BVI, multinational enterprises involved in transfer pricing disputes

Deadlines

• Within one month of the taxpayer initiating the MAP request: ITA must notify the taxpayer that the request has been received.
• Within one month of the taxpayer initiating the MAP request: ITA must notify the foreign competent authority about the request.
• Within 10 days but not to exceed 30 days from receipt of the request for further information: Taxpayer must provide requested additional documentation or information.
• Within 30 days after receipt of the additional information/documentation: ITA must notify the taxpayer of the eligibility status (accepted/rejected) of the MAP request.
• Within 30 days of receipt of the additional information/documentation: ITA must notify the foreign competent authority of the status (accepted/rejected) of the request.
• Six to twelve months: Typical duration of the evaluation and consultation process between the competent authorities.
• Within 30 days of reaching a mutual agreement: ITA must write to the taxpayer advising on the agreed outcome and next steps.
• Within 30 days from receiving notice of the mutual agreement: Taxpayer must respond in writing to the ITA confirming acceptance of the agreement.
• Within 90 days after confirmation of receipt of closing letters by the taxpayer and foreign competent authority, whichever is later: Implementation of the mutual agreement reached.
• No less than three years from the first notification of the action resulting in taxation (per the applicable DTA): Deadline within which a MAP case not in accordance with the Convention should be presented.
• Average of two years: Target timeframe for the ITA to resolve MAP cases, extendable by mutual agreement between competent authorities.
• No less than every three months: Frequency of periodic status updates between competent authorities during the review of a MAP case.