The OECD on October 14 released guidance for countries that seek to develop “synthesized text” of tax treaties, clarifying how the country’s ratification of a multilateral tax treaty developed by the OECD will affect the country’s existing bilateral tax treaties.
15 nations have already deposited their acceptance or ratification instrument for the multilateral tax treaty, called the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (MLI), and many more countries are expected to ratify the agreement in the future.
Some countries have sought to reach agreement with their tax treaty partners about how the new multilateral agreement will operate to amend their existing treaty and prepare clarifying text.
This new guidance, prepared by the OECD Secretariat, is designed to assist countries that wish to undertake that task.
Synthesized text for the UK-Slovenia tax treaty and the UK-New Zealand tax treaty has already been made public.
The MLI will become effective on January 1, 2019, for 47 tax treaties, the OECD said.
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