BEPS Action 15 - Multilateral Instrument - KPMG comments on the Multilateral Convention

BEPS Action 15 - Multilateral Instrument

The OECD has published the Multilateral Convention to implement the treaty aspects of the BEPS initiative. Our alert summarises the convention and our view on the impact it will have.


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On 25 November 2016 the OECD published the Multilateral Convention to implement the treaty aspects of the BEPS initiative in line with Action 15 of the BEPS Actions. We have prepared a summary of the key areas covered by the Convention and provide you with some insights from our BEPS specialists.

Key highlights:

  • The Convention applies in relation to a treaty where both contracting states have notified the Depositary that they intend the Convention to apply to it.
  • The Convention incorporates a number of alternatives and optimal provisions that generally will apply only where both Parties to a Covered Tax Agreement affirmatively choose to apply them.
  • The convention brings in strict time limits for progressing MAP issues which have previously only been recommended as best practice.
  • At a time when the number of disputes is expected to increase the improvements to the MAP process and the introduction of more widespread mandatory binding arbitration dispute resolution are very welcome.
  • Although the Convention demonstrates the determination of the country participants to succeed in creating an instrument to make changes to multiple treaties, it leaves a system that is even more complex than before.
  • Applying a standalone document to override a Covered Tax Agreement may make it more difficult in practice to determine the treaty position in relation to a specific transaction.
  • It is still unclear how details of which countries are party to the Convention, whether instruments of ratification have been deposited and what options have been exercised will be made publicly available by the OECD.

Please read our summary for more details and our view on the key implications of the Convetion.

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