Multilateral Convention: an Australian perspective - 16 June 2017
Australia, together with 67 other countries signed the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (the Convention) on 7 June 2017. The Convention operates to work alongside existing tax treaties in implementing the tax treaty-based recommendations arising from the G20/OECD BEPS project.
Australia’s signing of the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (the Convention) on 7 June 2017 marks an important milestone in the implementation of the tax treaty-related measures arising from the G20/OECD BEPS project, in areas including treaty abuse, permanent establishments and improving dispute resolution.
Based on country positions known to-date, the Convention will modify 30 of Australia’s 44 current tax treaties. Of particular interest is the adoption of the Principal Purpose Test, by Australia and most of the signatories, which will enable tax administrations to deny treaty benefits in certain circumstances.