International - An example of when the Mutual Agreement Procedure may be followed

One of the most common causes of taxation not in accordance with the terms of the Double Taxation Agreement is a transfer pricing adjustment resulting in taxation of the same profits in more than one country. For example, following a transfer pricing audit a treaty country may have increased the profits of an enterprise in relation to transactions with a UK associated enterprise. Those adjusted profits have already been included in the UK tax return and double taxation results. The UK enterprise may present his case under the Mutual Agreement Procedure to the Competent Authority for redress.