Developing a Multilateral Instrument to Modify Bilateral Tax Treaties, Action 15 -
2015 Final Report
Drawing on the expertise of public international law and tax experts, this report
explores the technical feasibility to develop a multilateral instrument to modify
tax treaties so as to efficiently implement the tax treaty-related BEPS measures.
The report concludes that such an instrument is desirable and feasible and that negotiations
for the multilateral instrument should be convened quickly. Based on this analysis,
a mandate has been developed for an ad-hoc group, open to the participation of all
countries on an equal footing, to develop the multilateral instrument and open it
for signature in 2016.
Base Erosion and Profit Shifting (BEPS) refers to tax planning strategies that exploit gaps and mismatches in tax rules to artificially shift profits to low or no-tax locations where there is little or no economic activity, resulting in little or no overall corporate tax being paid.
Since June 2017, nearly 80 countries have signed a new Multilateral Convention developed as part of the BEPS Project. The Convention will enable governments to swiftly update their networks of existing tax treaties and further reduce opportunities for tax avoidance. The Convention is expected to enter into force in mid-2018.