The Multilateral Convention to Implement Tax Treaty Related Measures to Prevent BEPS (MLI) will enter into force on 1 July 2018, following Slovenia depositing the fifth ratification instrument on 22 March 2018.
The entry into force of the MLI for double tax treaty Parties (as defined) determines when its provisions come into effect for the treaties between them. Different dates potentially apply for withholding taxes, other taxes, mutual agreement procedures to resolve disputes, and the use of arbitration to resolve disputes, where territories have chosen to apply arbitration.
We expect a significant number of the current 78 signatories to ratify the MLI and lodge the instrument of ratification with the OECD in time for many provisions to be in effect from 1 January 2019.
The attached Tax Policy Bulletin provides an overview of when and for which provisions the MLI will enter into effect in the bilateral tax treaties of the MLI signatories. The Bulletin also covers the - largely unforeseen - consequences of territories’ differing reservations regarding hybrid mismatches, treaty abuse, permanent establishments and dispute resolution.
