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The MLI to effect BEPS modifications to existing tax treaties has now been signed by governments covering 84 territories. Of those, 15 tax administrations/ governments have carried out ratification procedures sufficiently to bring the MLI into force for their territory on or before 1 January 2019.

In relation to bilateral treaties between any two of these 84 territories, the provisions of the MLI take effect from different dates, provided both territories have identified it as a covered tax agreement. These dates depend partly on the ratification procedures and otherwise on options chosen by the territories.  

A major consideration under the MLI may be the eligibility for a treaty benefit (including a reduced WHT rate), broadly, only if the relevant arrangement or transaction passes the principal purpose test (PPT). All the ratification territories have adopted the PPT. There are other MLI provisions that, according to UK and other territories’ options, might affect WHTs.

In relation to bilateral treaties involving the UK, BEPS recommendations affecting WHTs may apply to payments, accruals, etc: