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68 Jurisdictions Sign BEPS Multilateral Instrument

by Ulrika Lomas, Tax-News.com, Brussels

08 June 2017


68 countries have signed the OECD's Multilateral Convention, designed to swiftly implement a series of tax treaty-related measures proposed in the OECD's base erosion and profit shifting project into these countries' double tax agreements.

The signing ceremony for the Convention took place on June 7, 2017, in Paris. The multilateral instrument (MLI), developed by the OECD under Action 15 of the BEPS project, will transpose BEPS recommendations into over 1,100 tax treaties worldwide. The Convention will strengthen provisions to resolve treaty disputes, including through mandatory binding arbitration (which has been adopted by 25 signatories), to reduce double taxation and increase tax certainty for businesses.

Eight additional countries and jurisdictions have signed a letter expressing their intent to sign the Convention and additional countries and jurisdictions are actively working to prepare for signature in the near future. The position of each signatory under the Convention is now available on the OECD's website. The OECD said it will provide a database and additional tools on its website by the end of the year, to support taxpayers and tax administration with understanding and applying any potential changes.

The OECD has released a toolkit, which intends to further develop, which currently includes a legal note on the functioning of the MLI under public international law, a step-by-step overview on the application of the MLI, and a flowchart on the application of MLI provisions. It has also released answers to a total of 41 frequently asked questions.

The first modifications to bilateral tax treaties are expected to enter into effect in early 2018.

OECD Secretary-General Angel Gurria commented: "The signing of this Convention marks a turning point in tax treaty history. We are moving towards rapid implementation of the far-reaching reforms agreed under the BEPS project in more than 1,100 tax treaties worldwide, and radically transforming the way that tax treaties are modified. Beyond saving signatories from the burden of re-negotiating these treaties bilaterally, the new Convention will result in more certainty and predictability for businesses, and a better functioning international tax system for the benefit of our citizens."

TAGS: compliance | Finance | tax | investment | business | double tax agreement (DTA) | tax compliance | tax avoidance | law | Organisation for Economic Co-operation and Development (OECD) | ministry of finance | tax authority | agreements | multinationals | tax planning | transfer pricing | G20 | tax reform | trade | European Union (EU) | Europe | BEPS

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