In May 2019, the Financial Service Bureau has published a set of guidelines for Mutual Agreement Procedure (“MAP”) – a procedure to resolve disputes for Double Tax Agreements for the Avoidance of Double Taxation (“DTA”) with respect to Taxes on Income. The purpose of these guidelines is to provide practical information regarding the MAP whose request for initiation may be submitted before the Financial Service Bureau (“DSF”).
Irrespective of the remedies provided by the internal law of Macao SAR or of the other Party concerned, the request for initiating a MAP may be submitted to the DSF under a DTA. The MAP can be requested when a person (who is a resident of Macao SAR or who has the right of abode or is incorporated or otherwise constituted in Macao) covered by a DTA considers that the actions of Macao SAR and / or the other Contracting Party result or will result for him in taxation not in accordance with the provision of such DTA as following: (a) the taxpayer is deemed to be a resident of both Parties or where there is no agreement on the jurisdiction of which he is a resident; (b) the taxpayer and the tax authorities do not agree on the existence of a permanent establishment or on the characterization of certain items of income for the purposes of the application of the DTA; (c) the taxpayer and the tax authorities do not agree on the interpretation and application of provisions or principles of the DTA; (d) Transfer pricing adjustments between associated enterprises of different Contracting Parties, have occurred or will occur; (e) Adjustments of profits attributable to a permanent establishment situated in a Contracting Party of an enterprises of the other Contracting Party have occurred or will occur; (f) the taxpayer and the tax authorities that have made an adjustments do not agree as to whether the conditions of the application of an anti-abuse provision of a DTA have been met; (g) the taxpayer and the tax authorities that have made an adjustment do not agree as to whether the application of anti-abuse provision of an internal law is in conflict with the provisions of a DTA.
The requests to initiate a MAP should be in writing and in paper format for the case details in languages of Chinese, Portuguese or English within the time frame provided under the applicable DTA to the DSF. No fees are charged for the submission of a MAP request. DSF carries out the preliminary analysis within 30 days from receipt of a request. Before reaching a final solution of the case with the competent authorizes of the other party, the DSF notifies the terms and conditions of the Agreement to the person that submitted the MAP request, so that this person declares within 30 days whether he accepts them as a final resolution of the case. The acceptance of the Agreement reached under a MAP by the person that submitted the request obliges him to withdraw any pending cases in the judicial or administrative instances.