This content is from: Malta

Malta issues MAP guidelines

The conclusion of double tax treaties has grown to become one of Malta's key international tax policies, but its experience with mutual agreement procedures (MAP) and alternative dispute resolution mechanisms is in its infancy.

Mark Galea SalomoneDonald Vella

MAP is included in each of Malta's 70 tax conventions and the respective provision has, for the most part, always aligned with Article 25 of the OECD model tax convention. However, despite Malta's little practical experience in this arena, the Maltese Commissioner for Revenue issued guidance on the MAP on December 15 2016.

The guidelines relate to a MAP under tax conventions and under the EU Arbitration Convention. With regard to a MAP under the EU Arbitration Convention, it is pertinent to note that Malta applies the recommendations found in the revised code of conduct for the effective implementation of the EU Arbitration Convention. Consequently, and for the avoidance of doubt, if there is any conflict between the Maltese guidance and the code of conduct, the provisions of the latter will prevail.

In terms of the guidelines, a taxpayer must first raise an issue (such as one relating to a transfer pricing adjustment, the attribution of profits to a permanent establishment, or dual residence conflicts, amongst others) formally by requesting assistance in writing with the relevant contracting state. Taxpayers are strongly encouraged to ensure that the person concerned in the other contracting state also contacts its competent authority. To facilitate the expeditious resolution of a MAP case, the taxpayer is encouraged to submit all supporting material, promptly and simultaneously, to both competent authorities.

The minimum requirements for a MAP request for assistance include, among others:

  • Details of the taxpayer subject to the adjustment;
  • Contact details of the foreign tax administration;
  • Tax assessment years/periods involved;
  • Summary and analysis of the facts and issues;
  • Applicable articles of the relevant treaty; and
  • Copies of correspondence from the other tax administration.

Certain considerations are to be taken into account by the Inland Revenue Department (IRD) regarding whether they will accept a MAP request. If accepted, the IRD must communicate regularly with its counterpart (every 90 days), and must ensure that the matter is resolved in a timely manner. Once the matter is resolved, the Malta competent authority must communicate the terms of the resolution to the taxpayer imminently. If the request is denied, this decision may be appealed by the taxpayer.

The guidelines state that whilst the time taken to complete a MAP case may vary according to its complexity, the IRD will endeavour to conduct the MAP process as expeditiously as possible and to complete the case within 24 months from the date of acceptance of the taxpayer's MAP request.

The issuance of the guidelines is a step in the right direction for taxpayers. Not only is it an informative tool that sheds further light on the procedure followed by the IRD when a cross-border international tax dispute arises, but it also includes firm commitments from the Commissioner of Revenue to endeavour to resolve such disputes in a timely and efficient manner.

Mark Galea Salomone ( and Donald Vella (
Camilleri Preziosi
Tel: +356 21238989

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