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Germany Gazettes Law To Ratify The BEPS MLI

by Ulrika Lomas, Tax-News.com, Brussels

10 December 2020


Germany has completed the domestic ratification procedures necessary to soon notify the OECD of its intention to bring into effect the BEPS multilateral instrument (BEPS MLI) for its covered double tax treaties.

The country published in its November 27 edition of the Official Gazette a law, approved by the legislature, to ratify the BEPS multilateral agreement, signed by Germany on June 7, 2017.

The BEPS MLI is intended to enable countries to incorporate amendments into their double tax agreements to tackle tax base erosion and profit shifting (BEPS), without having to renegotiate bilateral treaties on a piecemeal basis. The treaty amendments are intended to counter hybrid mismatch arrangements, which can result in double non-taxation or double deductions for the same income, and treaty abuse. In addition, provisions are added to prevent the avoidance of permanent establishment rules and they are intended also to improve dispute resolution.

The BEPS MLI will come into effect for Germany's treaties from the first day of the fourth month following the country depositing its instrument of ratification with the OECD – that is, it would become effective for Germany from April 1, 2021, if Germany formally ratifies the deal during December 2020.

Germany indicated in June 2017 that it would seek to amend 35 of its double tax agreements. It will set out more concretely which agreements it is seeking to amend and how when it provides its notice to the OECD.

TAGS: Treaties | tax | Tax Treaties | agreements | transfer pricing | Germany | Tax | BEPS

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