23. Such repatriation is intended to restore the cash position of related companies if maturities had been applied for transactions that led to a transfer price adjustment; Some jurisdictions do encourage return and have specific rules for the procedure. It is recommended that any repatriation of funds be carried out only after approval of the redistribution of transfer prices as part of the mutual agreement procedure. The Mutual Agreement Procedure (MAP) (also known as the Competent Authority Procedure (CAP) is a management procedure designed to resolve the difficulties encountered: the OECD model contains an article on dispute resolution procedures agreed between the relevant authorities (Article 25). The article states that when a person feels that he is not taxed in accordance with the provisions of the convention on double taxation because of the actions of one or both of the contracting states, he has the right to submit a case to the competent authority of his state of residence. This right applies regardless of the remedies available in both states. The case must be brought within three years of the first notification of the offending appeal. In the revised guidelines, HMRC also recognizes that there may be circumstances in which foreign tax authorities enter into informal agreements with subjects, provided access to POPs is restricted. Hmrc will continue to consider providing facilities in such circumstances, although the likelihood of a total elimination of double taxation is reduced in cases where dialogue between HMRC and foreign tax administration is limited.
Mr McCabe was in dispute with the British tax authorities HMRC over the application of the Tiebreaker to Article 4, paragraph 2, of the Belgian Double Taxation Convention between Belgium and the United Kingdom. He submitted a file on POPs in accordance with Article 25, paragraph 1. This MAP resulted in an agreement between the relevant authorities that Mr. McCabe was domiciled in the United Kingdom. He rejected that decision and appealed the predisposition to the British Tax Court. The process of mutual unification (POP) remains the most widely used way and the best way to eliminate double taxation. The effective use of PPIs by different instruments has been of interest to the OECD and the EU for more than 20 years. According to bePS, the number of double taxes is increasing and the number of POPs continues to increase.
There is a growing emphasis on ensuring better dispute resolution techniques to more effectively eliminate double taxation. This article describes some of the features of the instruments currently available. 14. As part of the MAP procedure, the subject is informed in writing of the decision and receives an explanation of the outcome when an agreement is reached between the CAs concerned.