How to request a Mutual Agreement Procedure (MAP) in Saudi Arabia?

Saudi Arabia's tax system is primarily levied on income and profits generated within the Kingdom. The Zakat, Tax and Customs Authority (ZATCA) administers these taxes. If you're a taxpayer in Saudi Arabia and have a dispute with ZATCA regarding tax assessments, penalties, or withholding taxes, you may be eligible to request a Mutual Agreement Procedure.

This article explains the Mutual Agreement Procedure (MAP), how to obtain it, the step-by-step process involved, and a few FAQs.

What is a Mutual Agreement Procedure (MAP)?

A Mutual Agreement Procedure (MAP) is a mechanism established through tax treaties to resolve disputes between taxpayers and the tax authorities of two contracting countries. It allows for a collaborative approach to reach an amicable settlement on tax matters arising from transfer pricing disagreements, double taxation, or other tax-related issues.

How to Obtain a Mutual Agreement Procedure in KSA?

To initiate a MAP request in Saudi Arabia, you must follow a specific process outlined by ZATCA. Here's a general breakdown:

1. Eligibility: Ensure you meet the eligibility criteria set forth by the relevant tax treaty and ZATCA regulations.
2. Preparation: Gather all relevant documentation supporting your case, including tax returns, financial statements, and communication records with ZATCA.
3. Formal Request: Submit a formal written request to ZATCA outlining the nature of the dispute and the desired outcome.
4. Competent Authority: The ZATCA will then communicate with the competent authority of the other treaty country involved.
5. Negotiation & Settlement: Both competent authorities will negotiate to reach a mutually agreeable solution. This process may involve discussions, information exchange, and potential revisions to tax assessments.

Step-by-Step Process for Mutual Agreement Procedure in KSA

While a detailed step-by-step guide might require referring to official ZATCA resources, here's a high-level breakdown:

• Consult a Tax Professional: Due to the complexities involved, it is highly recommended that you consult a qualified tax advisor experienced with MAP procedures in Saudi Arabia.
• Gather Documentation: Compile all necessary documents to substantiate your claim.
• Prepare and Submit Request: Draft and submit a formal request to ZATCA, clearly stating the nature of the dispute and the desired resolution.
• Engage in Negotiations: Be prepared to participate in discussions and negotiations with ZATCA and the other country's competent authority.
• Settlement: The ultimate goal is to reach a mutually agreeable settlement that resolves the tax dispute.