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A historic day for world taxation
While not as significant as the day before in world history, 7 June will be a historic day for the global tax system as literally dozens of governmental representatives are expected to gather in Paris for the signing of the Multilateral Convention To Implement Tax Treaty Related Measures To Prevent Base Erosion And Profit Shifting, better known as the Multilateral Instrument or MLI.
Members of the global tax community are well familiar with OECD led Base Erosion and Profit Shifting (BEPS) actions which were launched in September of 2013. One of the greatest challenges facing those leading the BEPS actions has been how to amend the over 3,000 bilateral tax treaties currently in existence. The idea of a multilateral instrument was adopted to achieve this and forms BEPS Action 15. An ad hoc group was formed for the development of the MLI, meeting on a number of occasions with over 100 countries participating.
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It is expected that literally dozens of countries will be represented in Paris on 7 June for the signing of the MLI, which will make 7 June a historic date in world taxation history. But that won’t be the end of the BEPS or even the MLI process. It will be open other countries to sign on to the MLI at later dates and, indeed, many are expected to do so. And of course, the impact of the ideas and concepts introduced through the MLI will be developed only over the coming years.