The UK's implementation of the the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (MLI) has passed another hurdle on its way to changing many of our double tax treaties.
The Double Taxation Relief (Base Erosion and Profit Shifting) Order 2018 was made on 23 May 2018 (ie the statutory instrument passed its remaining stages in Parliament). It only remains for the instrument to be appropriately deposited, together with the UK's 'final' positions, at the Organisation for Economic Co-operation and Development (OECD).
The date of deposit is the date that determines when the MLI comes into force for the UK. There needs to be three clear months and then it will be in force from the 1st of the following month. Therefore, if the deposition happens in May, it would be in force from 1 September 2018; if it happens during June, it would be from 1 October 2018.
The actual impact on any specific treaty will then depend on when the MLI comes into force in the other territory concerned, as well as the options and reservations both parties have made in relation to a range of matters (including the date on which it will take effect for particular taxes).
For further details, please contact David Hammal or your usual PwC adviser.
