On 7 June 2017, Australia signed the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (the Convention), otherwise referred to as the Multilateral Instrument.
The Convention, a key outcome of the G20/OECD Base Erosion and Profit Shifting (BEPS) project, was developed to efficiently modify jurisdictions’ bilateral tax treaties to prevent their exploitation for tax avoidance purposes and to improve tax treaty-based dispute resolution mechanisms.
This Exposure Draft legislation would give the Convention the force of law in Australia. Pending the ratification of the Convention by Australia and its bilateral tax treaty partners, the Convention will modify the majority of Australia’s bilateral tax treaties to implement the relevant BEPS outcomes.
The Government invites all interested parties to make a submission in relation to the Exposure Draft legislation and its accompanying Explanatory Memorandum. Following this consultation process, the Explanatory Memorandum will be reviewed to reflect recent developments affecting the status of the Convention, including its recent signature by Malaysia.
The Convention and its Explanatory Statement, along with further information on the BEPS project and the OECD Model Tax Convention on Income and on Capital, are available on the OECD’s website.