Combating base erosion and profit-shifting: A primer on the new multilateral tax convention
On 7 June in Paris, 68 nations signed the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (BEPS)(the new Convention). Australia was one of the signatories. The new Convention sets minimum standards to be incorporated in tax agreements between nations. Some provisions in the new Convention are mandatory for signatories, while others are optional. In many cases, the provisions of the new Convention are intended to remedy the ‘OECD Model Tax Convention’. Today we offer a primer on the new Convention. We summarise the underlying rationale, some key components and the next steps for Australia. For the new Convention itself, go to http://www.oecd.org/tax/treaties/multilateral-convention-to-implement-tax-treaty-related-measures-to-prevent-BEPS.pdf. Base Erosion and Profit Shifting (BEPS) The new Convention arises from the OECD/G20 Base Erosion and Profit Shifting Project. Through…