OECD BEPS Multilateral Convention:
The OECD BEPS package contains tax-treaty related measures addressing gaps and mismatches in the application of tax rules in an international context. The implementation of these measures on tax treaties one-by-one could take decades to finalize. In order to avoid this situation, the Multilateral Convention to Implement Tax Treaty-Related Measures to Prevent Base Erosion and Profit Shifting (hereafter referred to as “the Multilateral Convention”) enables states to update their tax treaties consistently and in a reasonable timeframe.
Last Wednesday, Luxembourg, together with 67 other states, signed this Multilateral Convention. Apart from those signatories, nine other jurisdictions formally expressed their intent to sign, meaning 77 juridictions in total (and about 90 expected by the end of the year).
The Multilateral Convention provides various choices, so that it could be applied to multiple, sometimes considerably different, tax treaties and tax systems, which is why the convention contains two groups of provisions.
In the first place, states willing to implement the Multilateral Convention must comply with its minimum standards, which cover measures to counter treaty abuse and to improve dispute resolution.
Luxembourg's choises summarized in linked below:
Source: Deloitte Tax & Consulting - Alerts
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