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Extension of the German BEPS-MLI Implementation Act to further countries – German Federal Council Gives Its Approval

Noemi Strotkemper 22 May 2026

Authors: Dr. Daniel Liebchen, Dr. Noemi Strotkemper, Ann-Kathrin Lefarth

Double Taxation Agreements (“DTAs”) prevent double taxation. However, many of the more than 90 German DTAs do not comply with the OECD’s BEPS minimum standards. Rather than renegotiating each agreement individually, the OECD and the G20 countries created the so-called Multilateral Instrument (“MLI”) in 2017 – an international treaty that brings existing DTAs into line with the minimum standards en bloc for signatories and parties. Germany is a party to the MLI and had originally included only 14 DTAs within its scope of application. With the amendment to the BEPS-MLI Implementation Act now passed, this scope has been significantly expanded. This article unwraps what this means for German companies and their key trading partners.

Introduction

The Amendment Act to the BEPS-MLI Implementation Act of 22 November 2020 (“BEPS-MLI-UmsG”) significantly expands the scope of the BEPS-MLI-UmsG (cf. German Bundestag, BT-Drs. 21/3944). The Amendment Act to the BEPS-MLI-UmsG was passed by the Federal Parliament (“Deutscher Bundestag”) on 26 March 2026 and just recently approved by the Federal Council (“Deutscher Bundesrat”) on 8 May 2026 (German Bundesrat, BR-Drs. 213/26). This Amendment Act extends the scope of application significantly. Whereas originally only 14 DTAs were covered as so-called Covered Tax Agreements (“CTA”), the Amendment Act includes further 62 DTAs.

Consequently, a total of 76 DTAs are now covered by the BEPS-MLI-UmsG. The aim of the BEPS-MLI-UmsG is to identify DTAs that do not comply with the BEPS minimum standard and to bring them into line with that standard. Based on the concept of the MLI, this is achieved without bilateral renegotiation of the DTAs; in other words, the provisions of the MLI notified by the states will then take precedence over the corresponding provisions of the relevant bilateral DTAs. The following outlines which countries are likely to require amendments to German DTAs, and exactly which changes this entails, particularly regarding international mutual agreement and arbitration procedures.

For which DTAs has the MLI already entered into force and is applicable?

The fact that a DTA is covered by the BEPS-MLI-UmsG as a CTA does not necessarily mean that the MLI applies to the DTAs in question. This is because the actual applicability of the MLI to DTAs requires, at least within the German legal sphere, that an additional so-called BEPS-MLI Application Act (“BEPS-MLI-AnwG”) is also enacted for the DTAs concerned. Alternatively, it is also conceivable to revise the DTAs covered by the BEPS-MLI-UmsG to the minimum standard or the content of the MLI on a bilateral basis.

Up to date, of the 14 DTAs listed in the BEPS-MLI-UmsG, the BEPS-MLI-AnwG has only been enacted for 9 DTAs in Germany. This means that the MLI is currently only applicable to 9 DTAs – as of 1 January 2025, these were the 7 DTAs with Croatia, France, Greece, Malta, Slovakia, Spain, and Hungary, and as of 1 January 2026, the two further DTAs with Japan and the Czech Republic. The DTAs with Austria and Luxembourg are not covered as corresponding revised protocols to both DTAs implemented the BEPS measures on a bilateral basis. The DTAs with Italy and Turkey have not yet been covered because the MLI has not yet entered into force in those countries. Finally, Romania no longer treated the DTA with Germany as a CTA in the course of national implementation.

Which DTAs are newly covered as CTAs under the Amendment Act of the BEPS-MLI-UmsG?

There are a total of 62 DTAs. However, the entry into force of the MLI is currently out of scope for 21 of these DTAs as the respective treaty partners are still no party to the MLI. The OECD regularly updates the list of Signatories and Parties to the MLI. This is particularly evident in relation to the USA. Other affected countries are: Bangladesh, Belarus, Bolivia, Ecuador, Ghana, Iran, Kosovo, the Kyrgyz Republic, Liberia, Moldova, the Philippines, Sri Lanka, Syria, Tajikistan, Trinidad and Tobago, Turkmenistan, Uzbekistan, Venezuela, Zambia and Zimbabwe.

This leaves a potential scope of application of the MLI to further German DTAs only for 41 of the 62 DTAs with the following countries: Albania, Algeria, Argentina, Armenia, Azerbaijan, Belgium, Bosnia and Herzegovina, Canada, China, Costa Rica, Ivory Coast, Egypt, Georgia, Iceland, India, Indonesia, Israel, Jamaica, Kazakhstan, Kenya, Korea, Kuwait, Malaysia, Mongolia, Montenegro, Morocco, Namibia, New Zealand, North Macedonia, Norway, Pakistan, Poland, Portugal, Russia, Serbia, Slovenia, Thailand, Tunisia, Ukraine, Uruguay, Vietnam.

Among these DTAs there are DTAs included with Germany’s key trading partners from such as Canada, China, India, Indonesia, Israel, Korea, New Zealand, Norway, Ukraine, Thailand and Vietnam and of course – in addition some DTAs with EU Member States such as Belgium, Poland, Portugal and Slovenia. However, for the aforementioned DTAs and other DTAs that have been mutually notified as CTAs, the applicability of individual articles of the MLI still depends on whether the states have made matching notifications and/or reservations. This can generally also be verified in the OECD Matching Database. This database should usually be relatively up to date as it seems to be updated regularly.

Specific changes for mutual agreement and arbitration procedures with German participation

1. For the German DTAs with Italy, Belgium, Canada, Indonesia, Pakistan and Portugal, the DTAs must be amended to include the three-year initiation period provided for in the MLI.
2. For the German DTAs with Greece and Belgium, the obligation to conduct a unilateral review of the remedy before the mutual agreement procedure is initiated must also be included, as well as the obligation to make efforts to reach a mutual agreement.
3. For the German DTAs with Italy, Argentina, Belgium, Bolivia, Canada, Côte d’Ivoire, Iceland, Iran, Jamaica, Kenya, Morocco, New Zealand, Portugal and Thailand, the MLI provision requiring states to implement a mutually agreed solution regardless of any time limits provided for in the domestic law of the contracting states also applies.
4. Finally, the German DTAs with Italy, Belgium, New Zealand and Portugal are supplemented by a consultation procedure for gaps in the agreement; for Belgium, this also includes the consultation procedure for general disputes regarding interpretation and application.
5. The following German DTAs are to be supplemented with a counter-adjustment clause: Albania, Algeria, Armenia, Azerbaijan, China, Costa Rica, Georgia, Israel, Kazakhstan, Korea, Malaysia, North Macedonia, Norway, Poland, Slovenia, Tunisia and Uruguay.
6. The situation becomes somewhat less clear regarding the applicability of mandatory arbitration procedures. As to the question of to which DTAs Part VI (Art. 18 et seq. MLI) applies, no definitive and reliable information can currently be provided. The Amendment Act of the BEPS-MLI-UmsG does not specify which of the 62 treaty partners have, for their part, declared an commitment to conduct mandatory arbitration procedures based on Part VI of the MLI. Based on the OECD’s list of Signatories and Parties to the MLI, this should be the case in relation to Belgium, Canada, New Zealand, Poland, Portugal and Slovenia. But, for the EU Member States concerned (Belgium, Poland, Portugal and Slovenia), the arbitration procedure under the MLI will not be applicable de facto in Germany due to the unilaterally declared reservation regarding the primacy of the EU Dispute Resolution Directive and the EU Arbitration Convention. In relation to Canada and Armenia, it has been clarified that there is no primacy of the optional arbitration clauses – previously laid down in the DTAs. Regarding Armenia this notification is irrelevant though as Armenia has not committed for Part VI of the MLI. However, such primacy has in principle been declared for the mandatory arbitration clauses already being included in DTAs. This is, however, irrelevant in the present case because the MLI is already applicable in this respect (France, Japan), the DTAs have been bilaterally revised (Austria, Luxembourg) or the USA is not a contraction party to the MLI. Overall, it appears likely that mandatory arbitration proceedings based on Art. 18 et seqq. of the MLI will apply to the DTAs with Canada and New Zealand – unless these treaties will be subject to an bilateral treaty amendment.

What does this mean in practice?

Firt of all, no changes are taking effect at present. An effective application of the MLI to the newly added CTAs conditions the further enactment of a BEPS-MLI-AnwG by the German legislative or the bilateral amendment of the DTAs. This is not expected before 1 January 2027 – and probably even later. Also, no changes are to be expected in the short term in relation to countries such as the USA, which have not acceded to the MLI.

But, from perspective of the German treaty policy, a positive expansion of the scope of the MLI can be observed for the first time as the MLI implementation measures are including third countries for the first time. With regard to mutual agreement procedures and the obligation to make counter-adjustments, this is particularly to be welcomed in relation to countries such as China, Canada, New Zealand, Norway and Korea. Furthermore, the relevance of the MLI as a supplement to DTAs with third countries such as Canada and New Zealand through mandatory arbitration for the first time must be strongly emphasised and acknowledged.

This must be interpreted as a strong sign towards effective tax controversy management. It remains to be seen, however, whether the other countries will, for their part, declare a commitment to mandatory arbitration. Stay tuned, we will keep you informed.

Article tags

Germany | International Double Taxation | Transfer Pricing