OECD: Multilateral convention to implement BEPS into tax treaties

BEPS and tax treaties

The Organisation for Economic Cooperation and Development (OECD) today announced the completion of negotiations on a multilateral instrument to implement tax treaty-related base erosion and profit shifting (BEPS) recommendations pursuant to Action 15 of the BEPS project, along with an "explanatory statement." The multilateral instrument is intended to implement a series of tax treaty measures, and the new instrument will transpose the BEPS project items into more than 2,000 tax treaties. A signing ceremony will be held in June 2017 in Paris.


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According to today’s OECD release, the “Multilateral Convention to Implement Tax Treaty Related Measures to Prevent BEPS” includes:

  • Provisions intended to address the effects of hybrid mismatch arrangements in accordance with Action 2 of the BEPS project
  • Provisions addressing the granting of treaty benefits in inappropriate circumstances under BEPS Action 6
  • Amendments to the definition of "permanent establishment" as recommended under BEPS Action 7
  • Changes to facilitate access to and resolution of mutual agreement procedures consistent with BEPS Action 14 (including a mandatory binding arbitration provision that is very similar to that found in U.S. tax treaties)


The multilateral instrument enables all signatories to meet the treaty-related minimum standards under the BEPS project (the minimum standard for the prevention of treaty abuse under Action 6 and the minimum standard for the improvement of dispute resolution under Action 14).  Given that those minimum standards can be satisfied in different ways and that there are optional provisions included in the multilateral instrument as well, the multilateral instrument provides flexibility in various ways to accommodate the positions of various countries. 

Read text of the multilateral instrument, along with the explanatory statement, on the OECD website

Read a November 2016 report prepared by KPMG's EU Tax Centre

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