The Union Cabinet in India has given its approval for India’s signing of a multilateral convention to implement tax treaty-related measures to prevent base erosion and profit shifting (BEPS).
Implementation of the BEPS recommendations requires amendments to some 3,000 bilateral income tax treaties. Among the final BEPS recommendations is the multilateral instrument (convention) that is designed to allow for expedited changes to all covered bilateral tax treaties—that is, the multilateral convention provides a process for swiftly making changes to the treaties.
The convention basically would implement two minimum standards relating to the prevention of treaty abuse and dispute resolution through the “mutual agreement procedure.” The convention does not function in the same way as an amending protocol to a single existing treaty (that directly amends the text of the covered tax agreement). Instead, the multilateral convention is to be applied alongside existing tax treaties, modifying their application in order to implement BEPS measures.
India’s cabinet, in addition to giving its approval to the signing of the multilateral convention, has proposed to provide a list of bilateral income tax treaties that would be amended by the multilateral convention.
Read a May 2017 report [PDF 311 KB] prepared by the KPMG member firm in India
© 2018 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.