The Multilateral Convention to Implement Tax Treaty Related Measures to Prevent BEPS—Some Thoughts on Complexity and Uncertainty

Kleist, David

doi:10.1515/ntaxj-2018-0001

Abstract

The Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (MLI), which was signed in June 2017, raises a multitude of questions relating not only to the text of the treaty provisions but also to the way the MLI will interact with tax treaties, for instance, and what it will mean for the future development of tax treaty law and international cooperation in tax matters. This article focuses on two aspects of the MLI. First, it deals with the substance of the MLI by providing an overview of its background and content, including the many options available to the contracting states under the MLI. Second, some thoughts are presented on the effects of the MLI in terms of complexity and uncertainty.

References

Baker, Philip. 2017. “The Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting” British Tax Review (3): 281–4.
Search in Google Scholar Back to article
Bingham, Tom. 2010. The Rule of Law. London: Penguin Books.
Search in Google Scholar Back to article
Blouin, Jennifer L., Devereux, Michael, and Shackelford, Douglas A.2012. “Investment, Tax Uncertainty, and Aggressive Tax Avoidance”, mimeo.
Search in Google Scholar Back to article
Bosman, Alexander. 2017. “General Aspects of the Multilateral Instrument” Intertax 45 (10): 642-59.
Search in Google Scholar Back to article
Bradford, David F. 1986. Untangling the Income Tax. Cambridge, Massachusetts: Harvard University Press.
Search in Google Scholar Back to article
Brauner, Yariv. 2018. “McBEPS: The MLI – The First Multilateral Tax Treaty that Has Never Been” Intertax 46 (1): 6-17.
Search in Google Scholar Back to article
Chand, Vikram. 2018. ”The Principal Purpose test in the Multilateral Convention: An in-depth Analysis” Intertax 46 (1): 18-44.
Search in Google Scholar Back to article
Devereux, Michael. 2016. “Measuring corporation tax uncertainty across countries: Evidence from a cross-country survey”. Oxford University Centre for Business Taxation.
Search in Google Scholar Back to article
Engsbråten, Alf. 2017. “Hur kommer Sveriges undertecknande av det multilaterala instrumentet att påverka svenska skatteavtal?” Svensk Skattetidning (6–7): 397–412.
Search in Google Scholar Back to article
Hasset, Kevin A., and Gilbert E. Metcalf. 1999. “Investment with Uncertain Tax Policy: Does Random Tax Policy Discourage Investment?” The Economic Journal 109 (457): 372–93.10.1111/1468-0297.00453
Open DOI Search in Google Scholar Back to article
IMF (International Monetary Fund) and OECD (Organisation for Economic Co-operation and Development). 2017. IMF/OECD Report for the G20 Finance Ministers.
Search in Google Scholar Back to article
Kofler, Georg. 2016. “Some Reflections on the ‘Saving Clause”’. Intertax 44 (8/9): 574–89.
Search in Google Scholar Back to article
Mosquera Valderrama, Irma. 2015. “Legitimacy and the Making of International Tax Law: The Challenges of Multilateralism.” World Tax Journal 7 (3): 343–82.
Search in Google Scholar Back to article
Musgrave, Peggy, and Musgrave, Richard. 1989. Public Finance in Theory and Practice. 5th ed. Singapore: McGraw Hill Book Company.
Search in Google Scholar Back to article
OECD (Organisation for Economic Co-operation and Development). 2013. “Action Plan on Base Erosion and Profit Shifting”. Paris: OECD Publishing.
Search in Google Scholar Back to article
OECD (Organisation for Economic Co-operation and Development). 2014. “Developing a Multilateral Instrument to Modify Bilateral Tax Treaties”. Paris: OECD Publishing.
Search in Google Scholar Back to article
OECD (Organisation for Economic Co-operation and Development). 2015a. “Developing a Multilateral Instrument to Modify Bilateral Tax Treaties, Action 15 – 2015 Final Report”. Paris: OECD Publishing.
Search in Google Scholar Back to article
OECD (Organisation for Economic Co-operation and Development). 2015b. “Preventing the Granting of Treaty Benefits in Inappropriate Circumstances, Action 6 – 2015 Final Report”. Paris: OECD Publishing.
Search in Google Scholar Back to article
OECD (Organisation for Economic Co-operation and Development). 2016. “Explanatory Statement to the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting”. Paris: OECD Publishing.
Search in Google Scholar Back to article
OECD (Organisation for Economic Co-operation and Development). 2017a. Signatories and Parties to the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profits Shifting. Status as of 20 December 2017. http://www.oecd.org/tax/treaties/beps-mli-signatories-and-parties.pdf, accessed 22 January 2018.
Search in Google Scholar Back to article
OECD (Organisation for Economic Co-operation and Development). 2017b. Toolkit for Application of the Multilateral Instrument for BEPS Tax Treaty Related Measures, Legal Note on the Functioning of the MLI under Public International Law. http://www.oecd.org/tax/treaties/application-toolkit-multilateral-instrument-for-beps-tax-treaty-measures.htm, accessed 29 September 2017.
Search in Google Scholar Back to article
OECD (Organisation for Economic Co-operation and Development). 2017c. “Model Tax Convention on Income and on Capital: Condensed Version 2017”. Paris: OECD Publishing.
Search in Google Scholar Back to article
OECD (Organisation for Economic Co-operation and Development). 2017d. Frequently Asked Questions on the Multilateral Instrument (MLI). https://www.oecd.org/tax/treaties/MLI-frequently-asked-questions.pdf, accessed 29 September 2017.
Search in Google Scholar Back to article
OECD (Organisation for Economic Co-operation and Development). 2017e. Ground-breaking multilateral BEPS convention signed at OECD will close loopholes in thousands of tax treaties worldwide. http://www.oecd.org/tax/ground-breaking-multilateral-beps-convention-will-close-tax-treaty-loopholes.htm, accessed on 29 September 2017.
Search in Google Scholar Back to article
Pedersen, Frank H. 2012. “Advancing the Study of Tax Complexity with the Usability Model” Houston Business and Tax Law Journal XII (2): 282–361.
Search in Google Scholar Back to article
Schwarz, Jonathan. 2017a. Multilateral Negotiation of Bilateral Treaties. Kluwer International Tax Blog. http://kluwertaxblog.com/2017/02/21/multilateral-negotiation-of-bilateral-treaties/, accessed 28 September 2017.
Search in Google Scholar Back to article
Schwarz, Jonathan. 2017b. The BEPS MLI – Artificial Intelligence Needed. Kluwer International Tax Blog. http://kluwertaxblog.com/2017/06/22/beps-mli-artificial-intelligence-needed/, accessed 28 September 2017
Search in Google Scholar Back to article
World Bank. 2017. World Development Indicators database. http://databank.worldbank.org/data/download/GDP.pdf, accessed 29 September 2017.
Search in Google Scholar Back to article

The Multilateral Convention to Implement Tax Treaty Related Measures to Prevent BEPS—Some Thoughts on Complexity and Uncertainty

Abstract

Paradigm

My account