Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting signed
On June 7, 68 jurisdictions, including Belgium, have signed a Multilateral Convention (or ‘multilateral instrument’) that is intended to implement certain tax treaty related aspects of the OECD/G20 Base Erosion and Profit Shifting (BEPS) initiative. The Convention is designed as a quick and effective mechanism to allow governments to bring their treaties into line with these aspects of the BEPS project, instead of renegotiating individual treaties.
The OECD expressed the view that this will result in more certainty and predictability for businesses, and a better functioning international tax system for the benefit of citizens. Whether this will be the case remains to be seen, in particular given the opportunities under the Convention to make reservations and choose options. It should also be noted that the signing is just one step in the process and the Convention still needs to be ratified by the different countries that adhere to it and the tax treaties specified to which it is to apply.