Australia releases draft law adopting BEPS MLI, seeks to amend 30 bilateral tax treaties 

The Australian government on February 8 released for public comment a draft law that would give the force of law to a multilateral tax treaty designed to amend about 30 of Australia’s tax treaties with other nations.

The draft law would give effect to the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (Multilateral Instrument or MLI),  which incorporates into Australia’s existing bilateral tax treaties new provisions that would curtail tax avoidance by multinational enterprises and improve cross-border tax dispute resolution. The Australian government signed the MLI on June 7, 2017.

The MLI would amend Australia’s bilateral tax treaties by adding provisions agreed to by nations in the G20/OECD base erosion and profit shifting (BEPS) project. These provisions concern hybrid mismatches; tax treaty abuse; avoidance of permanent establishment status; and improvements to tax dispute resolution, including mandatory binding arbitration. 

The Australian government said in explanatory materials released with the draft law that the MLI is expected to modify 30 of Australia’s 44 bilateral tax agreements, namely, tax agreements with Argentina, Belgium, Canada, Chile, China, the Czech Republic, Denmark, Fiji, Finland, France, Hungary, India, Indonesia, Ireland, Italy, Japan, Malta, Mexico, the Netherlands, New Zealand, Norway, Poland, Romania, Russia, Singapore, the Slovak Republic, South Africa, Spain, Turkey, and the United Kingdom.

The Australian government has invited comments on the draft law and explanatory materials by February 23.

Be the first to comment

Leave a Reply

Your email address will not be published.