Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting
Signatories (blue) and Parties (orange) to the convention and Expression of Intent (pink)
Signed7 June 2017
LocationParis, France
Effective1 July 2018
Condition19 ratifications[1]
Signatories101[2]
Parties85[2]
DepositarySecretary-General of the Organisation for Economic Co-operation and Development
LanguagesEnglish and French

The Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting, sometime abbreviated BEPS multilateral instrument, is a multilateral convention of the Organisation for Economic Co-operation and Development to combat tax avoidance by multinational enterprises (MNEs) through prevention of Base Erosion and Profit Shifting (BEPS). The BEPS multilateral instrument was negotiated within the framework of the OECD G20 BEPS project and enables countries and jurisdictions to swiftly modify their bilateral tax treaties to implement some of the measures agreed.[3]

The substance of the tax treaty-related BEPS measures (under BEPS Actions 2, 6, 7 and 14) was agreed as part of the Final BEPS Package. Accordingly, the negotiation on the text of the BEPS multilateral instrument was focused on how the BEPS multilateral instrument would need to modify the provisions of bilateral or regional tax agreements in order to implement those BEPS measures.[4]

The BEPS multilateral instrument was adopted on 24 November 2016 and signed on 7 June 2017 by 67 jurisdictions for the first signing ceremony.[2] As of July 2018, 83 jurisdictions have signed the BEPS multilateral instrument, covering more than 1,400 bilateral tax treaties. It entered into force on 1 July 2018, among the first jurisdictions that ratified it.[2]

Functioning

The BEPS multilateral instrument looks to "prevent treaty abuse, improve dispute resolution, prevent the artificial avoidance of permanent establishment status and neutralise the effects of hybrid mismatch arrangements".[5] The BEPS multilateral instrument does not function in the same way as an amending protocol to a single existing treaty, which would directly amend the text of the existing tax treaty. Instead, it applies alongside the existing tax treaties. As stated in the Explanatory Statement[4] of the BEPS multilateral instrument this reflects the ordinary rule of treaty interpretation, as reflected in Article 30(3) of the Vienna Convention on the Law of Treaties, under which an earlier treaty between parties that are also parties to a later treaty will apply only to the extent that its provisions are compatible with those of the later treaty. With one convention, the signatory countries can achieve a work that would have taken decades otherwise.[6]

Consistent with the purpose of the BEPS multilateral instrument, which is to swiftly implement the tax treaty-related BEPS measures, the BEPS multilateral instrument also enables all parties to meet 2 of the 4 minimum standards which were agreed as part of the Final BEPS package.[7] Given, however, that each of those minimum standards can be satisfied in multiple different ways, and given the broad range of countries and jurisdictions involved in the development of the BEPS multilateral instrument, the BEPS multilateral instrument gives flexibilities with respect to ways of meeting it while remaining consistent with its purpose.[5] The BEPS multilateral instrument also provides flexibility by allowing to opt out of provisions which do not reflect a BEPS minimum standard.[4]

Parties

A list of ratified parties to the convention is shown below (as of September 2023). Of the 101 jurisdictions covered, 85 have deposited their instrument of ratification, approval or acceptance.[8]

JurisdictionDate of entry into force
 Albania1 January 2021
 Andorra1 January 2022
 Armenia1 January 2024
 Australia1 January 2019
 Austria1 July 2018
 Bahrain1 June 2022
 Barbados1 April 2021
 Belgium1 October 2019
 Belize1 August 2022
 Bosnia and Herzegovina1 January 2021
 Bulgaria1 January 2023
 Burkina Faso1 February 2021
 Cameroon1 August 2022
 Canada1 December 2019
 Chile1 March 2021
 China1 September 2022
 Costa Rica1 January 2021
 Croatia1 June 2021
 Curaçao1 July 2019
 Cyprus1 May 2020
 Czech1 September 2020
 Denmark1 January 2020
 Egypt1 January 2021
 Estonia1 May 2021
 Finland1 June 2019
 France1 January 2019
 Georgia1 July 2019
 Germany1 April 2021
 Greece1 July 2021
 Guernsey1 June 2019
 Hong Kong1 September 2022
 Hungary1 July 2021
 Iceland1 January 2020
 India1 October 2019
 Indonesia1 August 2020
 Ireland1 May 2019
 Isle of Man1 July 2018
 Israel1 January 2019
 Ivory Coast1 January 2024
 Japan1 January 2019
 Jersey1 July 2018
 Jordan1 January 2021
 Kazakhstan1 October 2020
 South Korea1 September 2020
 Latvia1 February 2020
 Lesotho1 November 2022
 Liechtenstein1 April 2020
 Lithuania1 January 2019
 Luxembourg1 August 2019
 Malaysia1 June 2021
 Malta1 April 2019
 Mauritius1 February 2020
 Mexico1 July 2023
 Monaco1 May 2019
 Netherlands1 July 2019
 New Zealand1 October 2018
 Norway1 November 2019
 Oman1 November 2020
 Pakistan1 April 2021
 Panama1 March 2021
 Papua New Guinea1 December 2023
 Poland1 July 2018
 Portugal1 June 2020
 Qatar1 April 2020
 Romania1 June 2022
 Russia1 October 2019
 San Marino1 July 2020
 Saudi Arabia1 May 2020
 Senegal1 September 2022
 Serbia1 October 2018
 Seychelles1 April 2022
 Singapore1 April 2019
 Slovakia1 January 2019
 Slovenia1 July 2018
 South Africa1 January 2023
 Spain1 January 2022
 Sweden1 October 2018
  Switzerland1 December 2019
 Thailand1 July 2022
 Tunisia1 November 2023
 Ukraine1 December 2019
 United Arab Emirates1 September 2019
 United Kingdom1 October 2018
 Uruguay1 June 2020
 Vietnam1 September 2023

See also

References

  1. ↑ "OECD Countries Sign Multilateral Treaty on Double Taxation". Bloomberg BNA. Retrieved 14 August 2017.
  2. 1 2 3 4 "Signatories and Parties (MLI Positions)" (PDF). OECD. Retrieved 25 July 2018.
  3. ↑ "Multilateral Convention to Implement Tax Treaty Related Measures to Prevent BEPS". OECD. Retrieved 25 July 2018.
  4. 1 2 3 "Explanatory statement to the MLI" (PDF). OECD. Retrieved 23 July 2018.
  5. 1 2 "FAQ on the MLI" (PDF). OECD. Retrieved 23 July 2018.
  6. ↑ "Multilateral instrument: no time for BEPS fatigue". EY Tax Insights. Retrieved 24 July 2018.
  7. ↑ "Press Release of the BEPS Project". OECD. Retrieved 25 July 2018.
  8. ↑ "Signatories and Parties (MLI Positions)" (PDF). OECD. 23 March 2023. Retrieved 30 March 2023.
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