Canada’s tax treaty MAP inventory increased in 2019, new report shows

By Doug Connolly, MNE Tax

The Canada Revenue Agency published on March 8 the annual report on its mutual agreement procedure (MAP) program for the calendar year 2019, revealing that MAP inventory increased that year. On average, most cases were handled within the CRA’s target timeline.

The MAP program is a dispute resolution mechanism designed to help taxpayers resolve issues of double taxation or of taxation inconsistent with a tax treaty.

The annual MAP report includes background statistics on the program and offers insights on the types of issues being resolved and the overall success rates.

The MAP program began 2019 with 147 MAP cases. During the year, 75 new cases were opened, and 60 were closed.

The average time to completion was 17.6 months – less than the CRA’s target completion time of 24 months. However, some cases took longer, with five of the cases resolved in 2019 having had a start date before 2016.

Of the cases closed in 2019, 68% resulted in full relief from double taxation, 8% were withdrawn by the taxpayer, and 7% were resolved by domestic remedy.

The remaining cases closed with “other outcomes,” including unjustified objections, no agreement, partial resolution, or unilateral resolution. Most of the cases closed in 2019 (80%) were initiated by Canada.

The CRA is currently involved in MAP cases with 23 jurisdictions, although nearly half (48%) of current cases are with the US. The current cases cover an array of sectors, from agriculture and the arts to technical services and transportation.