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Implementation of the Multilateral Convention

Status of the Multilateral Convention

The impact of implementation of the anti-tax treaty abuse measures under the Organization for Economic Co-operation and Development (OECD) base erosion and profit shifting (BEPS) project have had far-reaching consequences. The implications of certain BEPS Actions are still being worked through, particularly in relation to the multilateral instrument (MLI or Convention). The MLI constitutes a major change to international taxation and will enable international tax authorities around the world to challenge transactions and structures on a new basis.

OECD Multilateral Instrument Status Tracker

What is the MLI?

The MLI is one of the 15 Actions from the OECD BEPS action plan. It enables quick and consistent implementation of the tax treaty recommendations that follow from the BEPS project, namely hybrid mismatches (Action 2), tax treaty abuse (Action 6), permanent establishments (Action 7) and dispute resolution (Action 14).

The MLI will apply alongside a tax treaty and modify its application by allowing participating jurisdictions to adopt the BEPS recommendations without having to renegotiate each relevant treaty.

Status of the MLI as of 22 September 2020

As of 22 September 2020, 94 jurisdictions have committed to participate in the MLI (the list of signatories can be found on the OECD website). In addition, five countries have expressed their intention to join the MLI: Algeria, Eswatini (former Swaziland), Lebanon, Montenegro and Thailand.

Out of the 94 jurisdictions, 52 have ratified the MLI and deposited their instruments of ratification with the OECD. The MLI articles are effective for withholding taxes in 20201 for the 33 jurisdictions shown in bold below:

Albania Australia Austria Belgium Bosnia and Herzegovina
Canada Costa Rica Curaçao
Cyprus Czech Republic
Denmark Finland France Georgia Guernsey
Iceland India Indonesia Ireland Isle of Man
Israel Japan Jersey Kazakhstan Latvia
Liechtenstein Lithuania Luxembourg Malta Mauritius
Monaco Netherlands New Zealand Norway Oman
Poland Portugal Qatar Russia San Marino
Saudi Arabia Serbia Singapore Slovakia Slovenia
South Korea Sweden2 Switzerland Ukraine UAE
UK Uruguay      


1 Different effectives dates may apply for various MLI articles (withholding taxes, other taxes, dispute resolution). The application of the MLI articles to a specific tax treaty covered by the MLI (Covered Tax Agreement) should be considered on a case-by-case basis.

2 Although the MLI is in force in Sweden from 1 January 2019, it still must complete the internal procedures before the MLI will be effective in that country.

Next steps

The MLI will affect more than 1,600 tax treaties, and it is therefore critical for multinational enterprises and private equity funds to analyze and understand how the MLI will impact cross-border dividend, interest, and royalty transactions, and existing business operations. Find out more about the impact and implementation of the MLI by reviewing the status tracker.

Get in touch

Art Nolen
Tax Partner
anolten@deloitte.nl | +31882883248

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