IRAS recognises the importance of tax certainty in the fast-changing business environment and is committed towards assisting our taxpayers in resolving cross-border tax disputes with jurisdictions that have an Avoidance of Double Taxation Agreement (“DTA”) with Singapore. IRAS will seek to resolve these disputes via the Mutual Agreement Procedure (“MAP”) provisions in Singapore’s DTAs with the DTA partners in a consistent and principled manner, and in accordance with accepted international tax rules and principles.
Singapore has undergone the Stage 1 and Stage 2 MAP Peer Review under the Inclusive Framework on the OECD/G20 Base Erosion and Profit Shifting Project (“BEPS”) - Action 14 (Making Dispute Resolution Mechanisms More Effective). The peer review reports, which reflect the outcome of the assessment of Singapore’s implementation of the Action 14 Minimum Standard (which is accompanied by a “best practices report” addressing Singapore’s implementation of best practices), were published on 12 March 2018 (Stage 1) and 22 October 2020 (Stage 2). These reports can be found on the OECD's website.
What is MAP?
MAP is a dispute resolution facility provided under the MAP article in all of our DTAs. It is a facility through which IRAS and the relevant foreign competent authority (“CA”) resolve disputes where their taxpayers are not taxed in accordance with the provisions of the DTA. Usually, a MAP is entered into between two CAs, but it is also possible for IRAS to enter into a multilateral MAP involving three or more CAs. Please refer to Singapore's MAP profile for more information.
Mandatory binding arbitration provisions are included in some of our DTAs. These clauses provide for addressing issues which remained unresolved by the CAs, where these have been submitted to an arbitration panel for resolution after a specified time period, if the taxpayer requests in writing to do so. The arbitration panel is required to render a decision within a specified time period and the decision is generally binding on the CAs. The CAs are required to conclude a Competent Authority Agreement (“CAA”) to settle the mode of application of the mandatory binding arbitration provisions in the DTA. The concluded CAA will be published as an Annex to the respective DTA.
Please refer to Singapore's arbitration profile for more information. To view the DTAs with arbitration provisions and the CAA, click on the List of DTAs, Limited DTAs and EOI Arrangements and select “Yes” for the “Contains Arbitration Provision” filter.
Who can apply for MAP?
MAP is available to:
- A taxpayer who is tax resident in Singapore; and
- A taxpayer who is not tax resident in Singapore but has a branch in Singapore. However, such an application should be made by the taxpayer in the jurisdiction in which it is tax resident and with which Singapore has a DTA.
When to apply for MAP?
Taxpayers should only initiate MAP when taxation not in accordance with the provision of the DTA has occurred or is almost certain. Such taxation should not be just a possibility, such as the mere occurrence of audit or examinations.
MAP should be initiated by the taxpayers within the time limit specified in the MAP article of the relevant DTA (e.g. three years). Failure to do so may result in the CAs rejecting the MAP request. Taxpayers may seek resolution on issues that recur over multiple tax years, subject to the time limits provided in the relevant DTA.
For details on MAP relating to transfer pricing, please refer to the e-Tax Guide "Transfer Pricing Guidelines".
For details on MAP relating to matters other than transfer pricing, please refer to the e-Tax Guide "Avoidance of Double Taxation Agreements (DTAs)".