Landmark tax agreement to strengthen tax treaties enters into force with additional countries joining


27/06/2018 - Ministers and senior officials from Kazakhstan, Peru and the United Arab Emirates have signed the BEPS Multilateral Convention bringing the total number of signatories to 79 and the number of covered jurisdictions to 81. This Convention updates the existing network of bilateral tax treaties and reduces opportunities for tax avoidance by multinational enterprises. Estonia intends to sign the MLI on 29 June. The signatures this week come a few days before the Convention enters into force on 1 July 2018 for five of the jurisdictions that signed last year.

The Convention is the first multilateral treaty of its kind, allowing jurisdictions to integrate results from the OECD/G20 BEPS Project into their existing networks of bilateral tax treaties. The OECD/G20 BEPS Project delivers solutions for governments to close the gaps in existing international rules that allow corporate profits to “disappear” or be artificially shifted to low or no tax environments, where companies have little or no economic activity.

“The new signatures and the imminent entry into force of this landmark agreement underlines governments’ commitment to update the international tax rules and ensure they are fit for purpose in the 21st Century,” said Pascal Saint-Amans, Director of the OECD Centre for Tax Policy and Administration.

The entry into force of the Convention on 1 July follows its ratification by five jurisdictions – Austria, the Isle of Man, Jersey, Poland and Slovenia. Recently, Serbia, Sweden and New Zealand also deposited their instrument of ratification with the OECD, acting as the Depositary of the Convention. For these jurisdictions, the Convention will enter into force on 1 October 2018. More ratifications are expected in the coming months.

Treaty shopping is estimated to reduce the withholding effective tax rate by more than 5 percentage points from nearly 8% to 3% generating significant revenue losses for developped and developing countries. Over 115 countries and jurisdictions are currently working in the Inclusive Framework on BEPS to implement BEPS measures in their domestic legislation and bilateral tax treaties. The sheer number of bilateral treaties makes updates to the treaty network on a bilateral basis burdensome and time-consuming.


The Convention, negotiated by more than 100 countries and jurisdictions under a mandate from G20 Finance Ministers and Central Bank Governors, offers the opportunity to swiftly modify the more than 3,000 existing bilateral tax treaties. Measures developed in the course of the OECD/G20 BEPS Project that are included in the Convention include those on hybrid mismatch arrangements, treaty abuse, permanent establishment and dispute resolution, including an optional provision on mandatory binding arbitration, which has been taken up by 28 jurisdictions.

The OECD is the depositary of the Convention and is supporting governments in the process of signature, ratification and implementation.

The text of the Convention, the explanatory statement, background information, database, and positions of each signatory are available at

Media queries should be directed to Pascal Saint-Amans, Director of the OECD Centre for Tax Policy and Administration, (+33 6 26 30 49 23). 


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