Japan-Ireland tax treaty to be modified by MLI

The Japanese government on February 8 announced that a 1974 bilateral tax treaty between Japan and Ireland will be modified by a newer multilateral tax treaty, the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting, or MLI.

The Japanese government said that the modifications to the Japan-Ireland tax treaty would enter into force on May 1.

The MLI was designed by an OECD-led group of countries to swiftly incorporate provisions of the 2015 OECD/G20 base erosion profit shifting (BEPS) plan into existing bilateral tax treaties. The provisions are designed to curtail tax avoidance by multinationals through tax treaty shopping and other means and also aid cross-border tax dispute resolution.

The OECD announced on January 29 that Ireland deposited its instrument of ratification of the MLI with the OECD. Japan deposited its instrument ratifying the MLI with the OECD last September, according to an earlier OECD announcement.