The OECD, in its capacity as Depositary of the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (the MLI), has recently published the Arbitration Profiles of 30 jurisdictions applying Part VI on Arbitration of the MLI and an opinion of the Conference of the Parties to the MLI.

Arbitration Profiles

Part VI of the MLI allows jurisdictions choosing to apply it to adopt mandatory binding arbitration for the resolution of tax treaty disputes. The Arbitration Profiles have been developed to provide taxpayers with additional information on the application of Part VI of the MLI for each jurisdiction choosing to apply that Part. The Arbitration Profiles also allow those jurisdictions to make publicly available clarifications on their position on the MLI Arbitration. Each of the Arbitration Profiles includes:

  • Links to the competent authority agreements (CAAs) concluded by each jurisdiction choosing to apply Part VI of the MLI to settle the mode of application of that Part (which the OECD, as the Depositary of the MLI, needs to maintain and make publicly available);
  • Lists of certain reservations made by those jurisdictions, governing the scope of cases eligible for arbitration; and
  • Further clarifications that those jurisdictions wish to make publicly available on their position on the MLI arbitration.

Opinion of the Conference of the Parties to the MLI

On 15 March 2021, the Conference of the Parties to the MLI approved an opinion that clarifies the interpretation and application of Article 35 of the MLI on the entry into effect of its provisions. In particular, the opinion clarifies a question that had arisen with respect to the entry into effect of the MLI for taxes withheld at source where the latest of the dates of entry into force of the MLI for a pair of Contracting Jurisdictions is on 1 January of a given calendar year. An early version of this opinion, which was initially prepared by the Secretariat in 2018, was published on the OECD website on 14 November 2018.

The MLI so far covers 95 jurisdictions and has been ratified by 64 jurisdictions. It is the first multilateral treaty of its kind, allowing jurisdictions to swiftly transpose results from the OECD/G20 BEPS Project into their existing tax treaties, transforming the way tax treaties are modified. Once ratified by all Signatories, the MLI will modify over 1700 tax treaties, giving effect to the tax-treaty related BEPS measures on hybrid mismatch arrangements, treaty abuse and permanent establishment. The MLI will also strengthen provisions to resolve treaty disputes, including through mandatory binding arbitration, which has been taken up by 30 Parties.


(Source: OECD Tax)

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