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Six More States Sign The BEPS Multilateral Instrument

by Ulrika Lomas,, Brussels

25 January 2018

A further six countries have signed the BEPS multilateral instrument, enabling them to swiftly amend their double tax treaties to incorporate the recommendations put forward by the OECD as part of its base erosion and profit shifting Action Plan.

Barbados, Cote d'Ivoire, Jamaica, Malaysia, Panama, and Tunisia signed the deal on January 24, bringing the total number of signatories to 78. In addition, Algeria, Kazakhstan, Oman, and Swaziland have said they intend to sign the Convention, and a number of other jurisdictions are actively working towards signature by June 2018, the OECD said.

So far, four jurisdictions – Austria, the Isle of Man, Jersey, and Poland – have ratified the Convention, which will enter into force three months after one-fifth of jurisdictions deposit their instrument of ratification.

"Today's signing of the multilateral convention is another major step towards updating the international tax rules through the swift implementation of the BEPS package," said OECD Secretary-General Angel Gurria. "Beyond saving signatories from the burden of re-negotiating thousands of tax treaties bilaterally, the convention results in more certainty and predictability for businesses, and a better functioning international tax system for the benefit of our citizens."

The Convention, developed through inclusive negotiations involving more than 100 countries and jurisdictions, is intended to enable countries to quickly incorporate the proposed amendments into their tax treaties without having to individually renegotiate treaties on a bilateral basis – a process that would likely take a decade.

The changes to be made to treaties include introducing measures to prevent hybrid mismatches, which enable taxpayers to inappropriately claim double deductions for the same income or achieve double non-taxation. It also provides for amendments to tackle treaty abuse, to fix loopholes in permanent establishments rules, and to improve how countries cooperate to resolve double-tax disputes. On dispute resolution, countries can opt-in to provide mandatory binding arbitration. According to the OECD, 28 jurisdictions have committed to do so.

TAGS: Isle of Man | environment | Finance | tax | business | Swaziland | tax avoidance | Algeria | Jamaica | Jersey | legislation | transfer pricing | Austria | Kazakhstan | Malaysia | Poland | Tunisia | G20 | Barbados | Oman | Panama | Work | Tax | BEPS

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