Sars Mutual Agreement Procedure
As noted in the SARS guide, the map procedure provides the taxpayer with a pathway in addition to national claims and redress procedures. The subject may therefore simultaneously pursue POPs and internal remedies. In cases where the non-DBA tax has been introduced by the other state, the taxpayer may first raise the issue with the other state, since the agreement of the other state will deny the need for a MAP. The guide describes that POPs are essentially a specific procedure that complements internal dispute resolution procedures. Taxpayers can refer to the MAP if the tax has been or is collected, despite the provisions of the relevant DBA or the current tax treaty. The DBA or contracts are usually concluded between the governments of two countries. These countries are then designated by the DBA as parties or parties to such an agreement. The guide provides that SARS and the relevant foreign authority (the competent authorities) will endeavour to “resolve by mutual agreement any difficulty or doubt about the interpretation or application of the tax treaty in question.” According to the guide, the competent authorities can include: South African law provides for the use of POPs to resolve international tax disputes in the s108 (1) of the Income Tax Act, No. 58 of 1962 (Law). Article 108, paragraph 1, provides that South Africa can enter into an agreement with the government of any other jurisdiction to prevent, mitigate or discontinue the application of South African law and other fiscal sovereignty for the same income, profits or profits or donations. Section 108 (2) of the Act states that, after approval by Parliament and in light of possible constitutional restrictions, the DBA or the tax treaty and the articles it contains are part of South African domestic law. The POP is a procedure that allows the competent authorities or designated representatives of the competent authorities of the governments of the contracting states and the legal systems to act with the intention of settling international tax disputes. In the event that a primary transfer of transfer pricing or profits is made by a contract filing court, SARS will endeavour to resolve the matter with mutual understanding: the POP guidelines stipulate that subjects applying for POPs must provide GAZT, in addition to the information necessary to justify the case, with transfer pricing documents.
There is therefore no arbitration provision in all saudi Arabia`s tax treaties in the event of an agreement between the two contracting states, the case cannot be referred to arbitration.