OECD alert - BEPS action 15: Final text of multilateral instrument released

Published on: Nov 30, 2016

The OECD released the widely-anticipated text of the “Multilateral Convention to Implement Tax Treaty-Related Measures to Prevent Base Erosion and Profit Shifting” (Convention). An explanatory statement that accompanied the released provides clarification of the approach taken and how each article is intended to affect treaties covered by the Convention.

The Convention is designed to implement swiftly the tax treaty-related measures arising from the G20/OECD BEPS project. It includes a number of minimum standards that jurisdictions signing up to the Convention are required to implement. The Convention supports all previously agreed BEPS approaches by allowing jurisdictions to select from alternative options, which they will do by filing “technical reservations.” The Convention includes articles on permanent establishment (PE), treaty abuse, dispute resolution and hybrid mismatches. Changes to the effect of double tax treaties always will be prospective and are subject to jurisdictions both signing up to and ratifying the Convention. The Convention does not address any domestic law changes that are needed.

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