By Grant Gilmour
The MAP is a program provided by CRA that is available to all taxpayers with international businesses who may be subject to double taxation or taxation not in accordance with a tax treaty between two countries.
Canada has tax treaties with many countries across the world and they exist to avoid double taxation and to prevent tax evasion. Tax treaties define which taxes are to be paid to the country whom the taxpayer is a resident. Tax treaties will define which income (business, salary, self-employment, etc) will be taxed in either country and limit the amount of tax to avoid getting double taxed in both countries. They also reduce the amount of withheld taxes collected by a non-resident country from investment income such as interest and dividend income.
The Minister of National Revenue authorizes senior officials from CRA, referred to as the Competent Authority, to resolve a tax dispute under any tax treaty with another country. A similar authorization usually takes place in the treaty partner’s country. The MAP process is a service offered by the CRA on a no-fee basis. Taxpayers have the option to represent themselves or authorize a representative such as an accountant to engage the MAP request on their behalf.
The MAP process can take up to twelve months and a negotiation can take another twelve months. The process time is dependent on the cooperation between the competent authorities of each country. Although it can take a long time to get a resolution, it decreases a taxpayer’s time and expenses since the Competent Authority handles the case on behalf of the taxpayer.
If you would like to discuss double taxation or any other international tax issues, please contact Gilmour Knotts Chartered Accountants.
Grant Gilmour B.Sc Hons, MBA, CPA, CA, CICA-ITC is the International Tax Partner of Gilmour Knotts Chartered Accountant. To connect with Grant visit: