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OECD: Multilateral BEPS convention entry into force 1 July 2018

OECD: Multilateral BEPS convention entry into force

The Organisation for Economic Cooperation and Development (OECD) announced that the “Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting” (the MLI) will enter into force in five European jurisdictions beginning on 1 July 2018.

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The MLI is the first multilateral treaty of its kind, allowing jurisdictions to transpose results from the OECD/G20 BEPS project into their existing bilateral income tax treaties. The MLI thus will transform the way tax treaties are modified, without the need for bilateral treaty re-negotiations.  

As noted in an OECD release, the entry into force of the MLI reflects the “strong political commitment to a multilateral approach to fighting base erosion and profit shifting (BEPS) by multinational enterprises.” The entry into force follows from the deposit of the fifth instrument of ratification with the OECD by:

  • Slovenia (22 March 2018)
  • Austria (22 September 2017)
  • Isle of Man (19 October 2017)
  • Jersey (15 December 2017)
  • Poland (23 January 2018) 

The entry into force of the MLI on 1 July 2018 will bring it into legal existence in these five jurisdictions. In accordance with the rules of the MLI, its contents will start to have effect for existing tax treaties as from 2019.

 

Read a March 2018 report prepared by KPMG’s EU Tax Centre

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