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OECD multilateral convention to amend more than 2000 tax treaties

The OECD announced that, on 24 November 2016, the members of the ad hoc Group on the Multilateral Instrument implementing BEPS measures concluded the negotiations on the text of the Multilateral Convention. More than 100 jurisdictions signed the multilateral instrument, including most European countries, the United States, Australia, Canada, Brazil, China, Russia and India, to name but a few.

The Multilateral Convention to Implement Tax Treaty Related Measures to Prevent BEPS is intended to transpose results from the OECD/G20 BEPS Project into more than 2 000 treaties worldwide. It will implement minimum standards to counter treaty abuse and to improve dispute resolution mechanisms while providing flexibility to accommodate specific tax treaty elements.

The instrument will amend existing double taxation treaties, potentially over 2 000, and it offers flexibility to signatories to opt out from provisions which do not reflect BEPS minimum standards. It is envisaged that the convention will enter into force after five countries have ratified it. The convention shall be effective for a specific double tax treaty after parties to that treaty have ratified the instrument, and after a certain period has passed to ensure legal certainty.

According to OECD’s timeline, the signing ceremony is expected to take place in June 2017 in Paris.