When two countries challenge the tax treatment of the same cross-border transaction, a business may face double taxation. A tax treaty and its mutual agreement procedure can help address the dispute, but the authorities are not guaranteed to reach agreement.
What the procedure does
Under a mutual agreement procedure (MAP), the countries’ competent authorities consider how the applicable tax treaty applies. Türkiye’s tax administration describes the process for cases where taxation is inconsistent with a treaty. Eligibility depends on the treaty and the facts.
Case: a Turkish company and a related foreign company receive adjustments relating to one transaction. First identify the amounts and tax years affected, whether a treaty applies, and the article governing the issue. Two different adjustments do not by themselves establish double taxation.
Check deadlines and evidence
Check the filing deadline before waiting for discussions with the foreign counterparty to finish. GİB publishes a country-by-country table of treaty deadlines. Compare it with the treaty in force and establish which notification starts the period in the specific case. Do not assume one deadline applies to every treaty.
Gather notices and decisions from both tax authorities, agreements, calculations, proof of payment, residence evidence and transaction records. Record when each notice was received, the amount and the tax period. A transfer-pricing adjustment also calls for the pricing support and a calculation of the effect on both sides.
MAP and domestic appeals
With an adviser in each country, check appeal deadlines, possible suspension of collection and the effect of running procedures in parallel. Do not assume that a MAP request automatically stops every deadline or collection. A Turkish court decision does not automatically correct the tax position in the other country.
Where an agreement is reached, GİB guidance states that the taxpayer must notify acceptance or rejection within 30 days after notification; no response within that period is treated as rejection. Check current procedure and the consequences of acceptance for the particular case.
If the authorities do not agree
MAP is an effort to reach agreement, not a promise that double taxation will be eliminated. Check whether an arbitration mechanism exists under the applicable treaty and its operative rules; the OECD model does not automatically insert arbitration into every treaty. Assess remaining domestic remedies in both countries, their deadlines and expected cost.
Start with a single timeline of notices, audits and payments in both countries and give it to the advisers with the applicable treaty. This helps them assess the filing window and preserve other available options.
Sources
Reviewed on 27 October 2026: GİB mutual agreement procedure guidance; GİB table of treaty filing periods; OECD MAP profiles. Check applicability and current deadlines against the treaty and the facts of the case.