MAP has emerged as an effective alternative tax dispute resolution mechanism. Its use to resolve disputes has provided comfort to foreign investors and also reduced the number of cases under litigation. This is one of the actions taken by CBDT to ensure a fair and judicious dispute resolution regime to encourage foreign investment. In the last two years, increased focus on MAP has resulted in resolution of large number of disputes relating to double taxation.
Double Taxation Avoidance Agreements (DTAAs) i.e. Tax Treaties signed by India with various countries contain an Article to relieve taxpayers from double taxation through a Mutual Agreement Procedure (MAP). Internationally, the MAP is an important mechanism to resolve tax disputes between countries. The MAP program is led by one or more Competent Authorities designated by the signatory countries to resolve tax disputes under the provisions of each treaty.