UK and International Tax news
Multilateral Convention On BEPS Signed At OECD
Thursday 8th June 2017
Further to the issue by the OECD of the Multilateral Convention on BEPS under Action 15 in November 2016, ministers and high-level officials from 76 jurisdictions have signed or formally expressed their intention to sign the convention that will implement a series of tax treaty measures to update the existing network of bilateral tax treaties and reduce opportunities for tax avoidance by multinational enterprises.
The signing ceremony for the MLC took place during the annual OECD week in Paris, which brings together government officials and members of civil society from OECD and partner countries to debate the most pressing social and economic challenges confronting society. In addition to those signing, a number of other jurisdictions are actively working towards signature of the convention and more are expected to follow by the end of 2017.
The new instrument will transpose results from the OECD/G20 BEPS project in respect of four Actions including Hybrid Mismatches [under Action 2], Treaty Abuse [under Action 6], Avoidance of Permanent Establishment Status [under Action 7] and Improving Dispute Resolution [under Action 14] into more than 2,000 tax treaties worldwide.
It is expected that the first modifications to bilateral tax treaties are to enter into effect in early 2018.
The OECD is the depositary of the MLC and is supporting governments in the process of signature, ratification and implementation. The position of each signatory under the MLC is now available on the OECD website. By the end of 2017, the OECD will provide a database and additional tools on its website, facilitating the application of the MLC by taxpayers and tax administrations.
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