OECD: Countries sign multilateral instrument - KPMG Global
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OECD: Countries sign multilateral instrument, implementing BEPS in tax treaties

OECD: Countries sign multilateral instrument

Representatives from over 70 jurisdictions today participated in an OECD ceremony for the signing of a multilateral convention to implement tax treaty-related measures to prevent base erosion and profit shifting (BEPS).


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The multilateral instrument (MLI) was signed by 67 countries and jurisdictions, covering some 68 jurisdictions. Eight jurisdictions expressed their intention to become signatories of the MLI. Read the list of signatory countries and jurisdictions [PDF 127 KB].

Multilateral instrument (MLI)

The MLI enables all signatories to meet their 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—and also measures to address hybrid mismatch arrangements under Action 2 and the strengthened definition of permanent establishment under Action 7.  

The MLI provides flexibility in various ways to accommodate the positions of various countries. For example, countries may choose which existing tax treaties they would like to be modified by the MLI. In addition, flexibility is provided with respect to ways of meeting the BEPS minimum standards on treaty abuse and dispute resolution, and countries may opt out of or provide alternative provisions which do not reflect a BEPS minimum standard. Once a tax treaty has been listed by the two treaty partner countries, the treaty becomes an agreement to be covered by the MLI.  Read text of the MLI [PDF 276 KB].

The OECD reports that the 67 signatories have listed over 2,300 treaties that, in turn, have already resulted in over 1,100 matching agreements. The OECD expects the number of modified tax treaties to continually increase as additional jurisdictions sign the MLI.

In addition, the OECD noted that the following 25 of the signatories to the MLI on 7 June 2017 signed up for the arbitration provisions in the MLI: 

Andorra, Australia, Austria, Belgium, Canada, Fiji, Finland, France, Germany, Greece, Ireland, Italy, Liechtenstein, Luxembourg, Malta, the Netherlands, New Zealand, Portugal, Singapore, Slovenia, Spain, Sweden, Switzerland and the United Kingdom. 

This will lead to the introduction of arbitration to over 150 existing treaties. Most of the countries opting in for arbitration have opted for the default option of final offer arbitration (also referred to as “baseball arbitration”). 

Additional tools and guidance

The OECD continues to develop tools and guidance on the MLI and recently has provided the following documents on its website:

The OECD expects to launch a public online matching tool. The first part of the tool will be made available as soon as possible, after all the data from the various countries’ MLI positions has been carefully processed and analyzed. The tool will then be expanded and refined over the next couple of years, for example to include detailed information on the timing of the modifications made by the MLI.

KPMG observation

The signing of the MLI is seen as a catalyst for action by taxpayers who need to quickly assess how particular treaties will change, evaluate how and when their operations might be affected, and develop plans to address that impact. 


For more information, contact a KPMG tax professional:

Manal Corwin | +1 (202) 533-3127 | mcorwin@kpmg.com

Michael Plowgian | +1 (202) 533-5006 | mplowgian@kpmg.com

Jesse Eggert | +1 (202) 533-5512 | jeggert@kpmg.com 

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