A growing number of countries are participating in the Multilateral Instrument (MLI).
Six additional countries have signed on to the MLI treaty, bringing the total number of signatories to 78. The MLI modifies existing bilateral treaties to implement BEPS measures so that separate jurisdictions will not need to individually renegotiate separate treaties.
Barbados, Côte d'Ivoire, Jamaica, Malaysia, Panama and Tunisia all signed on to the MLI on January 24, 2018.
According to the OECD, Algeria, Kazakhstan, Oman and Swaziland intend to sign the MLI treaty, and a number of other jurisdictions are actively working towards signing by June 2018.
The MLI was developed as part of Action 15 of OECD Base Erosion and Profit Shifting (BEPS) initiative to modify existing bilateral treaties to implement BEPS measures. The instrument is intended to streamline the implementation of the tax treaty-related measures without the need to individually renegotiate each treaty.
Canada signed the MLI on June 7, 2017 but has not yet ratified it.
New matches for Canada
Canada provided a list of 75 treaties that would be covered by the MLI when it signed on to the agreement last June. The list included treaties with Barbados, Jamaica, Malaysia and Tunisia. However, for a tax treaty to be modified by the MLI, Canada's treaty partner must also ratify the MLI and list its tax treaty with Canada as a covered treaty.
Each of these four countries have listed their respective tax treaty with Canada as a covered treaty. Therefore Canada's tax treaties with these countries will need to be read alongside the MLI once it enters into force (the first day of the month following the third month after both countries have deposited their instruments of ratification) and becomes effective.
For more information, contact your KPMG adviser.