NOTES-

### Action 1: Addressing the Tax Challenges of the Digital Economy

#### Issue:

The rapid digital transformation has revolutionized the global economy, challenging
traditional international tax rules which were based on physical presence and profit
allocation. Digital businesses can scale without a physical footprint, rely heavily on
intangible assets, and use data centrally, which complicates taxation.

#### Significance:

A predictable, efficient, and sustainable international tax system is crucial for global
economic growth and welfare. The current system struggles to address
digitalization's impact, risking a fragmented approach with unilateral actions that
could harm investment and economic growth.

#### Solution:

The OECD/G20 Inclusive Framework aims to find a comprehensive, consensus-

based solution that addresses both the allocation of taxing rights and remaining
BEPS issues. This involves public consultations and economic analyses to support
sustainable tax system reforms.

#### Result:

The efforts aim to prevent a fragmented approach and maintain the integrity of the
international tax system, ensuring tax equity between traditional and digital
businesses

### Action 2: Neutralising the Effects of Hybrid Mismatch Arrangements

#### Issue:

Hybrid mismatch arrangements exploit differences in tax treatment between

jurisdictions to achieve double non-taxation or long-term deferral of taxation, eroding
the tax bases of involved jurisdictions.

#### Significance:

These arrangements not only reduce tax revenues but also negatively impact
competition, efficiency, transparency, and fairness in the global tax system.

#### Solution:

Recommendations target mismatches in tax treatment of financial instruments or

entities, and similar opportunities through branch structures. The common approach
involves sharing practical examples among OECD/G20 Inclusive Framework
members to ensure consistent application of the new rules.

#### Result:

Many countries have adopted rules to address hybrid mismatches, including the UK,
Australia, New Zealand, and EU Member States. The US has clarified hybrid
mismatch rules under the Tax Cuts and Jobs Act

### Action 3: Designing Effective Controlled Foreign Company (CFC) Rules

#### Issue:

CFC rules counter the risk of profit shifting and tax base erosion by attributing certain
income categories of foreign companies to their shareholders.

#### Significance:

Without effective CFC rules, taxpayers can shift income to foreign subsidiaries to
defer taxation and reduce the tax base of their home country.

#### Solution:

Recommendations provide a framework for defining a CFC, determining income

subject to the rule, and ensuring the elimination of double taxation risks. These are
designed to help jurisdictions implement effective CFC rules tailored to their needs.

#### Result:

By mid-2019, nearly 50 OECD/G20 Inclusive Framework countries had enacted CFC

rules. EU Member States have CFC rules in effect since 2019, with more countries
considering adopting such rules.

### Action 4: Limiting Base Erosion Involving Interest Deductions and Other
Financial Payments

#### Issue:

Interest payments, both third-party and intragroup, can be used to erode the tax
base by deducting expenses in high-tax jurisdictions while income is taxed at lower
rates or not at all in the recipient's jurisdiction.

#### Significance:

Interest deductions can lead to double non-taxation, eroding the tax base and giving
rise to unfair competitive advantages and inefficiencies.

#### Solution:
The 2015 Action 4 report recommends linking net interest deductions to the level of
economic activity, measured using EBITDA. It includes a fixed ratio rule, a group
ratio rule, and targeted rules to address specific risks.

#### Result:

By 2019, many OECD and Inclusive Framework members had adopted or were
aligning their legislation with these recommendations. The EU implemented a 30%
EBITDA cap on interest deductibility, and other countries are following suit

### Action 5: Countering Harmful Tax Practices More Effectively

#### Issue:

The OECD Forum on Harmful Tax Practices reviews preferential regimes that can
erode the tax base of other jurisdictions, focusing on transparency and substantial
activities requirements in no or nominal tax jurisdictions.

#### Significance:

Harmful tax practices distort competition and reduce tax revenues, undermining the
fairness and efficiency of the international tax system.

#### Solution:

The Forum assesses preferential regimes, conducts peer reviews, and monitors
compliance with transparency frameworks. It also reviews substantial activities
requirements to ensure a level playing field.

#### Result:

The continuous monitoring and peer review ensure that jurisdictions comply with
agreed standards, thereby reducing harmful tax practices globally

### Action 6: Preventing Treaty Abuse

#### Issue:

Bilateral tax treaties, while preventing double taxation, have also facilitated treaty
abuse and treaty shopping, where entities exploit treaties to minimize their tax
liabilities unfairly.

#### Significance:

Treaty abuse undermines the objectives of tax treaties, reducing tax revenues and
creating unfair competitive advantages.

#### Solution:
The Action 6 report sets a minimum standard requiring tax treaties to include anti-
abuse provisions, with flexibility for jurisdictions to adapt these provisions to their
specific contexts.

#### Result:

Jurisdictions are committed to incorporating these anti-abuse provisions into their tax
treaties, enhancing the protection against treaty shopping and maintaining the
integrity of the international tax system.

### Action 7: Preventing the Artificial Avoidance of Permanent Establishment

Status

**Issue:**

Businesses were using strategies to avoid creating a taxable presence, known as a

permanent establishment, in certain jurisdictions under tax treaties. This included
replacing subsidiaries with commissionaire arrangements to shift profits without
changing business functions.

**Significance:**

These avoidance strategies resulted in cross-border income being untaxed or taxed

at low rates, undermining tax bases and fairness in tax systems.

**Solution:**

Changes to the definition of permanent establishment in the OECD Model Tax

Convention:

- Intermediaries concluding contracts on behalf of foreign enterprises will create a

taxable presence unless independent.

- Restrictions on exceptions for activities of a preparatory or auxiliary nature to

prevent fragmentation.

- Addressing the splitting-up of contracts to circumvent construction site exceptions.

**Result:**

These changes were incorporated into the 2017 OECD Model Tax Convention and
Part IV of the Multilateral Instrument (MLI), with adoption by nearly 90 jurisdictions to
strengthen global tax systems .

### Actions 8-10: Aligning Transfer Pricing Outcomes with Value Creation

**Issue:**
Transfer pricing rules needed to ensure that the allocation of profits among MNE
group members aligned with the actual economic activities and value creation.
Previous guidelines were vulnerable to manipulation, leading to profit misallocation.

**Significance:**

Ensuring that profits are taxed where economic activities and value creation occur
helps prevent base erosion and profit shifting, maintaining fair tax bases across
jurisdictions.

**Solution:**

- **Action 8:** Focus on transfer pricing issues related to intangibles, addressing

their mobility and valuation challenges.

- **Action 9:** Address the allocation of risks and returns to capital within MNE
groups, ensuring alignment with actual activities.

- **Action 10:** Tackle high-risk transactions and methods used to divert profits,
ensuring alignment with value-creation.

**Result:**

Progress includes additional guidance on profit attribution to permanent

establishments, revisions on profit split methods, and new guidelines on financial
transactions. These changes align transfer pricing outcomes with economic realities

### Action 11: Measuring and Monitoring BEPS

**Issue:**

The lack of quality data on corporate taxation hindered the measurement of tax
avoidance impacts and the effectiveness of BEPS measures.

**Significance:**

Accurate data is essential for policymakers to assess the effectiveness of BEPS

measures and understand the extent of tax avoidance issues.

**Solution:**

Developing new and enhanced datasets and analytical tools, including the Corporate
Tax Statistics database and the Country-by-Country Reports (CbCRs), to analyze
BEPS impacts and corporate taxation trends.

**Result:**

The Corporate Tax Statistics database now includes data from over 50 jurisdictions,
covering nearly 7500 CbCRs. This improved data collection supports ongoing
analysis and policy adjustments to address BEPS .
### Action 12: Mandatory Disclosure Rules

**Issue:**

Tax authorities lacked timely and relevant information on aggressive tax planning
strategies, impeding effective risk assessment and policy responses.

**Significance:**

Early and comprehensive information on aggressive tax planning enables authorities

to address tax risks promptly, ensuring the integrity of tax systems.

**Solution:**

Recommendations for mandatory disclosure rules requiring taxpayers and advisors

to report aggressive tax planning arrangements, with a balance between information
needs and compliance burdens.

**Result:**

The adoption of mandatory disclosure rules, such as those in the EU under Council
Directive (EU) 2018/822, enhances transparency and allows for effective responses
to aggressive tax planning .

### Action 13: Country-by-Country Reporting (CbC Reporting)

**Issue:**

Multinational enterprises (MNEs) often engaged in profit shifting to low-tax

jurisdictions, making it difficult for tax authorities to assess and address BEPS risks.

**Significance:**

Country-by-Country Reporting provides tax authorities with comprehensive data on

MNEs' global allocation of income, profits, taxes paid, and economic activities,
facilitating more effective BEPS risk assessments.

**Solution:**

All large MNEs must prepare a CbC report, which is shared with tax administrations
for high-level transfer pricing and BEPS risk assessments.

**Result:**

The implementation of CbC reporting has significantly enhanced the ability of tax
authorities to monitor and address BEPS risks, promoting greater tax transparency
and accountability among MNEs .
### Action 14: Making Dispute Resolution Mechanisms More Effective

**Issue:**

- **Problem:** Many tax treaties include a Mutual Agreement Procedure (MAP) to

resolve tax disputes between jurisdictions. Despite this, challenges remain in
ensuring timely resolution and implementation of MAP cases.

- **Significance:** Effective dispute resolution mechanisms are crucial for handling

international taxation issues and preventing prolonged disputes, which can impact
global business operations.

**Solution:**

- The BEPS Action 14 Minimum Standard, adopted in October 2015, includes 21

elements and 12 best practices across four key areas:

1. Preventing disputes

2. Availability and access to MAP

3. Resolution of MAP cases

4. Implementation of MAP agreements

- A peer review process was initiated to assess and enhance the implementation of
these standards.

- The process involves two stages: evaluation and follow-up on recommendations.

**Results:**

- Initial peer review covered 82 jurisdictions, revealing significant improvements in

MAP processes and practices.

- Notable progress includes reduced time for closing cases and better alignment of
tax treaties with the MAP standard.

- The continued monitoring process, starting in 2022, will ensure ongoing compliance
and improvements .

### Action 15: Multilateral Instrument (MLI)

**Issue:**

- **Problem:** Updating bilateral tax treaties to reflect BEPS recommendations is

resource-intensive and slow.
- **Significance:** Modernizing tax treaties is essential to address base erosion and
profit shifting, ensuring fair taxation and reducing loopholes exploited by
multinational enterprises.

**Solution:**

- The Multilateral Instrument (BEPS MLI) allows governments to amend existing tax
treaties collectively, implementing BEPS measures efficiently.

- The MLI includes provisions to counter treaty abuse and improve dispute resolution
mechanisms, accommodating various tax treaty policies of different jurisdictions.

**Results:**

- Over 100 jurisdictions have joined the MLI, with the instrument entering into force
on July 1, 2018, and effective from January 1, 2019.

- The MLI facilitates a synchronized update of tax treaties, enhancing global efforts to
combat tax avoidance and improve the international tax system's integrity .
FULL INFORMATION ::

Action 1 Tax Challenges Arising from

Digitalisation
Addressing the tax challenges raised by digitalisation is currently the top priority for the
OECD/G20 Inclusive Framework, and has been a key area of focus of the BEPS Project since
its inception. This work has delivered several important outputs covering both direct and
indirect tax issues.

What is the issue?

Recent, rapid and expansive digital transformation has had deep economic and societal
impacts resulting in significant changes. This has sparked global debates in many legal and
regulatory realms and international tax is no different. The tax implications are wide-ranging
affecting both direct and indirect taxation, broader tax policy issues, and tax administration.

At the centre of the debate is whether international income tax rules, developed in a "brick-
and-mortar" economic environment more than a century ago, remain fit for purpose in the
modern global economy. The fundamental elements of the global tax system which
determined where taxes should be paid ("nexus" rules based on physical presence) and what
portion of profits should be taxed ("profit allocation" rules based on the arm's length
principle), have served their purpose well. Namely, they have enshrined tax certainty and
helped to eliminate double taxation stimulating global trade.

Today, however, three important phenomena facilitated by digitalisation – scale without

mass, reliance on intangible assets, and the centrality of data – pose serious challenges to
elements of the foundations of the global tax system.

On one hand, the emergence of new and often intangible value drivers have revolutionised
entire sectors creating new business models while continuously eroding the need for physical
proximity to target markets. This continuously challenges the effectiveness of existing profit
allocation and nexus rules to distribute taxing rights on income generated from cross-border
activities in a way that is acceptable to all countries, small and large, developed and
developing (the so-called allocation of taxing right issue).

On the other hand, new technologies have facilitated tax avoidance through the shifting of
profits by multinational enterprises (MNEs) to low or no tax jurisdictions. This is the essence
of the base erosion and profit shifting (BEPS) project and remains a top priority of the work
of the members of the OECD/G20 Inclusive Framework.

Why does it matter?

The centrality of a predictable, efficient and sustainable international tax system within the
ecosystem of economic growth and global welfare cannot be overstated.
Growing discontent among countries has catapulted these issues to paramount importance
and the urgency to act has left governments in search of effective responses. The result of
nearly a century of multilateral efforts to create a clear, consistent, and co-ordinated tax
system lies in the balance.

Given the nature of these challenges and the difficulty to put borders around the digitalised
economy, the approach at this critical juncture is clear: a comprehensive consensus-based
solution that deals with both the allocation of taxing rights and the remaining BEPS issues.
This would secure and sustain the international income tax system and increase tax equity
amongst traditional and digital businesses.

Failure to deliver, however, will ultimately lead to a patchwork of unilateral actions, which in
a fragile global economy, would harm investment and economic growth hampering the
ability of governments to collect revenues and invest in programmes.

The recent success of the elimination of double non-taxation through the BEPS Project
illustrates the strength of a co-ordinated multilateral approach.

What are we doing to solve it?

Members of the OECD/G20 Inclusive Framework on BEPS have been dedicated to finding a
comprehensive, consensus-based solution to the two challenges arising from digitalisation,
and committed to deliver this solution by 2021.

Specifically, the Inclusive Framework has convened public consultations engaging key
stakeholders including governments, businesses, civil society, academia, and the wider public
welcoming a broad array of opinions on the matter to help us chart a path forward.

To reinforce sustainability, the Inclusive Framework is also conducting economic analyses

and impact assessments to ensure that any solution complements existing conventions
securing the integrity of the global tax system.

All members of the Inclusive Framework have dedicated significant resources and attached
substantial political imperative to finding a timely resolution of the issues at stake.

Action 2 Neutralising the effects of hybrid

mismatch arrangements
BEPS Action 2 called for the development of model treaty provisions and recommendations
regarding the design of domestic rules to neutralise the effects of hybrid instruments and
entities.

The work by OECD member states and Inclusive Framework member jurisdictions on BEPS
Action 2 culminated in the 2015 OECD report on Neutralising the Effects of Hybrid
Mismatch Arrangements.

Action overview
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What is the issue?

Hybrid mismatch arrangements are used in aggressive tax planning to exploit differences in
the tax treatment of an entity or instrument under the laws of two or more tax jurisdictions to
achieve double non-taxation, including long-term taxation deferral.

Why does it matter?

These types of hybrid mismatch arrangements were widespread and resulted in a substantial
erosion of the taxable bases of the jurisdictions concerned. These risks were highlighted in
the context of international banking in the 2010 OECD report Addressing Tax Risks
Involving Bank Losses and a subsequent review by various OECD member countries
identified examples of tax planning using hybrid mismatch arrangements which led to the
2012 OECD report Hybrid Mismatch Arrangements: Tax Policy and Compliance issues.The
2012 report identified that hybrid mismatch arrangements, in addition to their impact on tax
revenues, also have an overall negative impact on competition, efficiency, transparency and
fairness.

What are we doing to solve it?

BEPS Action 2 recommendations target mismatches resulting from differences in the tax
treatment of financial instruments or entities. The work on hybrid mismatches was
subsequently expanded to deal with similar opportunities that arise through the use of branch
structures, resulting in a 2017 OECD report Neutralising the Effects of Branch Mismatch
Arrangements.

As part of the common approach to addressing hybrid mismatches, work continues amongst
OECD/G20 Inclusive Framework members to share practical examples of these structures to
ensure consistent, comprehensive and coherent outcomes from the application of the new
rules.

What are the results so far?

Since announcement of the Action 2 recommendations, a number of Inclusive Framework

countries have rapidly adopted rules to address a comprehensive range of hybrid and branch
mismatches. The United Kingdom, Australia and New Zealand have enacted legislation
consistent with the common approach in Action 2 and, in 2019 the US Treasury issued
regulations clarifying the application of the hybrid mismatch rules introduced under the Tax
Cuts and Jobs Act. European Union Member States adopted Council Directive (EU)
2017/952 which requires hybrid and branch mismatch rules to be effective in member states
no later than the beginning of 2020.

Action 3 Controlled Foreign Company

The Action 3 recommendations outline approaches to attribute certain categories of income
of foreign companies to the shareholder(s) in order to counter offshore structures that shift
income from the shareholder jurisdiction.

The work by OECD member states and Inclusive Framework member jurisdictions on BEPS
Action 3 culminated in the 2015 OECD report Designing Effective Controlled Foreign
Company Rules.

Action overview

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What is the issue?

Controlled foreign company (CFC) rules respond to the risk that taxpayers can strip the tax
base of their country of residence and by shifting income into a foreign company that is
controlled by the taxpayers. Without such rules, CFCs provide opportunities for profit
shifting and long-term deferral of taxation.

Why does it matter?

Since the first CFC rules were enacted in 1962, an increasing number of jurisdictions have
implemented these rules. However, existing CFC rules have often not kept pace with changes
in the international business environment, and many of them have design features that do not
tackle base erosion and profit shifting risks effectively.

What are we doing to solve it?

In response to the challenges faced by existing CFC rules, the BEPS Action Plan called for
the development of recommendations regarding the design of CFC rules. The OECD 2015
Action 3 report set out recommendations in the form of building blocks for the design of
effective CFC rules, which include the definition of a CFC, exemptions and thresholds,
approaches for determining the type of income subject to the rule, computation of CFC
income, the attribution of CFC income to shareholders and measures to eliminate the risk of
double taxation. These recommendations are not minimum standards, but are designed to
ensure that jurisdictions that choose to implement them will have rules that effectively
prevent taxpayers from inappropriately shifting income into foreign subsidiaries.

What are the results so far?

As at mid-2019, almost 50 OECD/G20 Inclusive Framework countries have now enacted

CFC rules, with EU Member States all having CFC rules in effect since the beginning of
2019 following the adoption of Council Directive (EU) 2016/1164, with a number of
additional countries considering the adoption of CFC rules for the first time.
The latest edition of Corporate Tax Statistics, published in July 2020, collected information
on CFC rules for the first time. The data highlights that comprehensive and effective CFC
rules have the effect of reducing the incentive to shift profits from a market jurisdiction into a
low-tax jurisdiction, and that out of the 122 Inclusive Framework members surveyed, 49 had
CFC rules in operation in 2019, with different approaches to the type of income covered and
the presence of substantial activity tests.

Action 4 Limitation on Interest Deductions

The Action 4 recommendations aim to limit base erosion through the use of interest expense
to achieve excessive interest deductions or to finance the production of exempt or deferred
income. The work by the Inclusive Framework member jurisidictions on Action 4 resulted in
the 2015 OECD report Limiting Base Erosion Involving Interest Deductions and Other
Financial Payments.

Action overview

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What is the issue?

Multinational groups may achieve favourable tax results by adjusting the amount of debt in a
group entity. BEPS risks in this area may arise in three basic scenarios:

 Groups placing higher levels of third party debt in high tax countries.
 Groups using intragroup loans to generate interest deductions in excess of the
group’s actual third party interest expense.
 Groups using third party or intragroup financing to fund the generation of tax
exempt income.

Why does it matter?

The use of third party and related party interest is perhaps one of the most simple of the
profit-shifting techniques available in international tax planning. The fluidity and fungibility
of money makes it a relatively simple exercise to adjust the mix of debt and equity in a
controlled entity.

In particular, the deductibility of interest expense can give rise to double non-taxation in both
inbound and outbound investment scenarios. The interest payments are deducted against the
taxable profits of the operating companies while the interest income is taxed at comparatively
low tax rates or not at all at the level of the recipient. This is despite the fact that in some
situations the multinational group may have little or no external debt.

What are we doing to solve it?

The 2015 Action 4 report on Limiting Base Erosion Involving Interest Deductions and Other
Financial Payments focused on the use of all types of debt giving rise to excessive interest
expense or used to finance the production of exempt or deferred income. In particular, this
report established rules that linked an entity’s net interest deductions to its level of economic
activity within the jurisdiction, measured using taxable earnings before interest income and
expense, depreciation and amortisation (EBITDA). This approach includes three elements: a
fixed ratio rule based on a benchmark net interest/EBITDA ratio; a group ratio rule which
may allow an entity to deduct more interest expense depending on the relative net
interest/EBITDA ratio of the worldwide group; and targeted rules to address specific risks.

What are the results so far?

As at mid-2019, a number of OECD and Inclusive Framework members have adopted

interest limitations rules or are in the process of aligning their domestic legislation with the
recommendations of Action 4. From the commencement of 2019, all EU Member States
apply an interest cap that restricts a taxpayer’s deductible borrowing costs to generally 30
percent of the taxpayer’s earnings before interest, tax, depreciation and amortisation
(EBITDA). Various other countries have also taken steps to limit interest deductibility (e.g.,
Argentina, India, Malaysia, Norway, South Korea) or are in the process of aligning their
domestic legislation with the recommendations of Action 4 (e.g., Japan, Peru, Viet Nam).

The latest edition of Corporate Tax Statistics published in July 2020 collected, for the first
time, information on interest limitation rules, which can assist in understanding progress
related to the implementation of BEPS Action 4. The data highlights that interest limitation
rules can limit base erosion via the use of interest expense to achieve excessive interest
deductions or to finance the production of exempt or deferred income. It also shows that
information on the presence and design of interest limitation rules is available for 134
Inclusive Framework jurisdictions, of which 67 had interest limitation rules in place in 2019.

Action 5 Harmful tax practices

MINIMUM STANDARD

The Action 5 Report is one of the four BEPS minimum standards. Each of the four BEPS
minimum standards is subject to peer review in order to ensure timely and accurate
implementation and thus safeguard the level playing field. All members of the Inclusive
Framework on BEPS commit to implementing the Action 5 minimum standard, and commit
to participating in the peer review.

Action overview

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What is the issue?

The OECD Forum on Harmful Tax Practices (FHTP) has been conducting reviews of
preferential regimes since its creation in 1998 in order to determine if the regimes could be
harmful to the tax base of other jurisdictions. The current work of the Forum on Harmful Tax
Practices (FHTP) comprises three key areas.

 Firstly, the assessment of preferential tax regimes to identify features of such

regimes that can facilitate base erosion and profit shifting, and therefore have the
potential to unfairly impact the tax base of other jurisdictions.
 Secondly, the peer review and monitoring of the Action 5 transparency
framework through the compulsory spontaneous exchange of relevant information
on taxpayer-specific rulings which, in the absence of such information exchange,
could give rise to BEPS concerns
 Thirdly, the review of substantial activities requirements in no or only nominal tax
jurisdictions to ensure a level playing field.

Action 6 Prevention of tax treaty abuse

MINIMUM STANDARD

BEPS Action 6 addresses treaty shopping through treaty provisions whose adoption forms
part of a minimum standard that members of the BEPS Inclusive Framework have agreed to
implement. It also includes specific rules and recommendations to address other forms of
treaty abuse. Action 6 identifies tax policy considerations jurisdictions should address before
deciding to enter into a tax agreement.

Action overview

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What is the issue?

Over the last decades, bilateral tax treaties, concluded by nearly every jurisdiction in the
world, have served to prevent harmful double taxation and remove obstacles to cross-border
trade in goods and services, and movements of capital, technology and persons. This
extensive network of tax treaties (3000 to 4000 treaties in force worldwide) has, however,
also given rise to treaty abuse and so-called "treaty-shopping" arrangements.

Treaty shopping typically involves the attempt by a person to indirectly access the benefits of
a tax treaty between two jurisdictions without being a resident of one of those jurisdictions.
There are a wide number of arrangements through which a person who is not a resident of a
jurisdiction that is a party to a tax agreement may attempt to obtain benefits that a tax
agreement grants to a resident of that jurisdiction.

Taxpayers engaged in treaty shopping and other treaty abuse strategies undermine tax
sovereignty by claiming treaty benefits in situations where these benefits were not intended to
be granted, thereby depriving jurisdictions of tax revenues.
Why does it matter?

Treaty abuse is one of the most important sources of BEPS concerns. It is undesirable for
several reasons, including:

 Treaty benefits negotiated between the parties to a treaty are economically extended
to residents of a third jurisdiction in a way the parties did not intend. The principle of
reciprocity is therefore breached and the balance of concessions that the parties make
is altered;
 Income may escape taxation altogether or be subject to inadequate taxation in a way
the parties did not intend; and
 The jurisdiction of residence of the ultimate income beneficiary has less incentive to
enter into a tax treaty with the jurisdiction of source, because residents of the
jurisdiction of residence can indirectly receive treaty benefits from the jurisdiction of
source without the need for the jurisdiction of residence to provide reciprocal benefits.

What are we doing to solve it?

As part of the BEPS package, the Action 6 Report sets out one of the four BEPS minimum
standards, which is that members of the BEPS Inclusive Framework commit to include in
their tax treaties provisions dealing with treaty shopping to ensure a minimum level of
protection against treaty abuse. They also agreed that some flexibility in the implementation
of the minimum standard is required as these provisions need to be adapted to each
jurisdiction’s specificities and to the circumstances of the negotiation of tax agreements.

The minimum standard on treaty shopping requires jurisdictions to include two components
in their tax agreements: an express statement on non-taxation (generally in the preamble) and
one of three methods of addressing treaty shopping.

The Action 6 Report sets out other specific rules and recommendations to address other forms
of treaty abuse.

To foster the implementation of the minimum standard and other BEPS treaty-related
measures in the global treaty network, a Multilateral Instrument (the BEPS MLI) that can
modify existing bilateral tax agreements was concluded.

The implementation of the Action 6 minimum standard is subject to a peer review process.
The first three peer reviews on the implementation of the Action 6 minimum standard were
carried out in 2018, 2019 and 2020, following the process set out in the Peer Review
Document (2017). The peer reviews for 2021, 2022 and 2023 were governed by a revised
peer review methodology set out in the Revised Peer Review Document (2021). The peer
review for 2024 onwards will be governed by a further revised peer review methodology set
out in the Revised Peer Review Documents (2024).

The BEPS Action 6 Revised Peer Review Documents (2024) include the Terms of Reference
which set out the criteria for assessing the implementation of the minimum standard, and the
methodology which sets out the procedural mechanism by which the review will be
conducted. Members of the Inclusive Framework on BEPS approved these Revised Peer
Review Documents which are an updated version of the 2021 Peer Review Documents, in
2024. Paragraph 30 of the Revised Peer Review Documents (2021) provided that the
methodology would be reviewed as necessary, with the expectation that the next review
would be carried out in 2026. In light of the successful implementation of the minimum
standard to date, the methodology has been revised to provide for ongoing targeted assistance
to those members of the Inclusive Framework that still need to implement the Action 6
minimum standard, with a comprehensive peer review process to be carried out once every
five years.

PEER REVIEWS

What are the results so far?

The latest peer review on the implementation of the Action 6 minimum standard reveals that
a large majority of Inclusive Framework members have modified, or are in the process of
modifying, their treaty network to implement the minimum standard and other BEPS treaty-
related measures.

As in previous editions, the latest peer review report continues to demonstrate the efficiency
of the BEPS Multilateral Instrument(BEPS MLI) in implementing the minimum standard. It
is by far the main tool of Inclusive Framework members for implementing the minimum
standard. The majority of the jurisdictions that have signed the BEPS MLI have listed almost
all their treaties to be covered under the BEPS MLI.

The provisions of the BEPS MLI have started to take effect with respect to treaties concluded
by pairs of jurisdictions that have signed and ratified the BEPS MLI. For the treaties for
which the BEPS MLI is effective, tax administrations can now use effective treaty provisions
to put an end to treaty shopping.

Action 7 Permanent establishment status

The work carried under BEPS Action 7 provides changes to the definition of permanent
establishment in the OECD Model Tax Convention to address strategies used to avoid having
a taxable presence in a jurisdiction under tax treaties.

Action overview
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What is the issue?

Tax treaties generally provide that the business profits of a foreign enterprise are taxable in a
jurisdiction only to the extent that the enterprise has in that jurisdiction a permanent
establishment to which the profits are attributable. The definition of permanent establishment
included in tax treaties is therefore crucial in determining whether a non-resident enterprise
must pay income tax in another jurisdiction.
The BEPS Action Plan called for a review of that definition to prevent the use of certain
common tax avoidance strategies used to circumvent the former Model permanent
establishment definition, such as arrangements through which taxpayers replace subsidiaries
that traditionally acted as distributors by commissionnaire arrangements, with a resulting
shift of profits out of the jurisdiction where the sales took place without a substantive change
in the functions performed in that jurisdiction.

Why does it matter?

Strategies used to avoid having a taxable presence in a jurisdiction under tax treaties may
cause cross-border income to go untaxed or be taxed at low rates. Taken together, the tax
treaty changes suggested in the Report on Action 7 enable jurisdictions to address BEPS
concerns resulting from tax treaties, which was a key focus of the work mandated by
the BEPS Action Plan.

What are we doing to solve it?

BEPS Action 7 proposes several changes to the definition of permanent establishment in

the OECD Model Tax Convention to counter BEPS:

 changes to ensure that where the activities that an intermediary exercises in a

jurisdiction are intended to result in the regular conclusion of contracts to be
performed by a foreign enterprise, that enterprise will be considered to have a taxable
presence in that jurisdiction unless the intermediary is performing these activities in
the course of an independent business.
 changes to restrict the application of a number of exceptions to the definition of
permanent establishment to activities that are preparatory or auxiliary nature and will
ensure that it is not possible to take advantage of these exceptions by the
fragmentation of a cohesive operating business into several small operations;
 changes to address situations where the exception applicable to construction sites is
circumvented through the splitting-up contracts between closely related enterprises.

To foster the implementation of these changes in the global treaty network, jurisdictions
negotiated a Multilateral Instrument (the MLI) to modify existing bilateral tax treaties in
2016.

What are the results so far?

The changes to the permanent establishment definitions were integrated in the 2017 OECD
Model Tax Convention and in Part IV of the MLI (Articles 12 to 15). The Multilateral
Instrument (MLI) is a flexible instrument that allows jurisdictions to adopt BEPS treaty-
related measures to counter BEPS and strengthen their treaty network. The MLI was signed
by nearly 90 jurisdictions and about half of the MLI Signatories have so far adopted the MLI
articles that implement the permanent establishment changes.

Action 8-10 Transfer Pricing

BEPS Actions 8-10 address transfer pricing guidance to ensure that transfer pricing outcomes
are better aligned with value creation of the MNE group. In this regard, Actions 8-10 clarify
and strenghten the existing standards, including the guidance on the application of the arm’s
length principle and an approach for appropriate pricing of hard-to-value-intangibles within
the arm’s length principle.

Action overview

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What is the issue?

Over the last decades and in step with the globalisation of the economy, worldwide intra-
group trade has grown exponentially. Transfer pricing rules, which are used for tax purposes,
are concerned with determining the conditions, including the price, for transactions within an
MNE group resulting in the allocation of profits to companies within the group in different
countries. In this regard, based on the arm’s length principle, transactions between associated
enterprises have to be priced as if the enterprises were independent, operating at arm’s length
and engaging in comparable transactions under similar conditions and economic
circumstances.

The arm’s length principle has proven useful as a practical and balanced standard for tax
administrations and taxpayers to evaluate transfer prices between associated enterprises, and
to prevent double taxation. However, with its perceived emphasis on contractual allocations
of functions, assets and risks, the existing guidance on the application of the principle has
also proven vulnerable to manipulation. This manipulation can lead to outcomes which do not
correspond to the value created through the underlying economic activity carried out by the
members of an MNE group.

Why does it matter?

As part of the BEPS package, the Actions 8-10 Reports enhance the guidance on the arm’s
length principle to ensure that what dictates results is the economic rather than the paper
reality. In this regard, the work under Actions 8-10 seeks to align transfer pricing outcomes
with the value creation of the MNE group. In other words, the guidance provided under
Actions 8-10 provides guidance to determine the transfer pricing outcomes in accordance
with the actual conduct of related parties in the context of the contractual terms of the
transaction. These and other changes reduce the incentive for MNEs to shift income to “cash
boxes” – shell companies with few if any employees and little or no economic activity, which
seek to take advantage of low or no-tax jurisdictions.

Specifically, the revised guidelines on transfer pricing address the situation where a capital-
rich member of a group, i.e. a cash box, simply provides assets such as funding for use by an
operating company but performs only limited activities. If the capital-rich member does not
in fact control the financial risks associated with its funding, then it will be entitled to no
more than a risk-free return, or less if, for example, the transaction is not commercially
rational and therefore the guidance on non-recognition applies.

Key areas of guidance

The report contains revisions to the OECD Transfer Pricing Guidelines to align transfer
pricing outcomes with value creation. The revised guidance focuses on the following three
key areas.

ACTION 8 - INTANGIBLES

Action 8 addresses transfer pricing issues relating to controlled transactions involving

intangibles, since intangibles are by definition mobile and they are often hard-to-value.
Misallocation of the profits generated by valuable intangibles has heavily contributed to base
erosion and profit shifting.

ACTION 9 - RISKS & CAPITAL

Work under Action 9 considers the contractual allocation of risks, and the resulting allocation
of proifts to these risks, which may not correspond with the activities actually carried out.
Moreover, Action 9 addresses the level of returns to funding provided by a capital-rich MNE
group member, where those returns do not correspond to the level of activity undertaken by
the funding company.

ACTION 10 - HIGH-RISK TRANSACTIONS

Action 10 focuses on other high-risk areas, including the scope for addressing profit
allocations resulting from controlled transactions which are not commercially rational, the
scope for targeting the use of transfer pricing methods in a way which results in diverting
profits from the most economically important activities of the MNE group, and the use of
certain type of payments between members of the MNE group (such as management fees and
head office expenses) to erode the tax base in the absence of alignment with the value-
creation.

What are the results so far?

Significant progress has been made on the projects mandated by the 2015 Final Report on
Actions 8-10, including but not limited to the following achievements:

 Additional guidance on the attribution of profits to permanent establishments resulting

from the changes in the Action 7 Final Report to Article 5 of the OECD Model Tax
Convention was published in March 2018.
 Revised guidance on transactional profit split method (Action 10) was published in
June 2018 and will be incorporated into the next edition of the OECD Transfer
Pricing Guidelines.
 Additional guidance addressed to tax administrations on the application of the hard-
to-value intangibles (HTVI) approach (Action 8) was finalised in June 2018 and it
will be incorporated in the next edition of the OECD Transfer Pricing Guidelines.
  New transfer pricing guidance on financial transactions (Actions 4 and 8-10) was
published in February 2020 and it will be incorporated in the next edition of
the OECD Transfer Pricing Guidelines.

Action 11 BEPS data analysis

The BEPS Action 11 report Measuring and Monitoring BEPS established methodologies to
collect and analyse data on the economic and fiscal effects of tax avoidance behaviours and
on the impact of measures proposed under the BEPS Project.

Action overview
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What is the issue?

The adverse fiscal and economic impacts of tax avoidance strategies have been the focus of
the BEPS Project since its beginning in 2013. In 2015, OECD research estimated that the cost
of tax avoidance by multinational enterprises (MNEs) ranged from USD 100 to $240 billion,
which is equivalent to 4-10% of global corporate income tax (CIT) revenues. In addition to
significant revenue losses, BEPS also causes other adverse economic effects, such as tilting
the playing field in favour of tax-aggressive MNEs, exacerbating the corporate debt bias,
distorting the location of highly mobile, intangible assets and misdirecting foreign direct
investment.

The 2015 Action 11 report Measuring and Monitoring BEPS highlighted that the lack of
quality data on corporate taxation has been a major limitation to measuring the fiscal and
economic effects of tax avoidance as well as any efforts to measure the impact of the
implementation measures agreed as part of the BEPS Project. Increasing the quality of the
data and the analytical tools available, through the ongoing work under Action 11, is crucial
in being able measure the impact of tax avoidance and the effect of the implementation of the
BEPS measures in curbing these practices.
FIND OUT MORE

Why does it matter?

Measuring the impact and scale of BEPS activities and the effect of the implementation of the
BEPS measures are important components of the ongoing work of the OECD/G20 Inclusive
Framework on BEPS. Such measurement and monitoring is necessary to inform both
policymakers and taxpayers of the effectiveness of the BEPS measures and the extent to
which BEPS issues continue to exist.
What are we doing to solve it?

As part of the ongoing work under Action 11, the Inclusive Framework is developing new
and enhanced datasets and analytical tools that can assist in measuring and monitoring the
fiscal and economic impacts of tax avoidance and the effects of the implementation of the
BEPS measures.

In particular, the Inclusive Framework is working to improve the quality and expand the
range of information available to analyse BEPS. The Corporate Tax Statistics database,
which was first launched in January 2019, has assembled a variety of data relevant to the
analysis of BEPS and orporate taxation more generally. In developing the database, the
OECD worked closely with members of the Inclusive Framework and other jurisdictions
willing to participate, and as a result, it includes information for all members of the Inclusive
Framework.
The second edition of Corporate Tax Statistics (OECD 2020) included the first aggregated
and anonymised statistics prepared from data received on Action 13 Country-by-Country
Reports (CbCRs) in 2020. Subsequent editions expanded these CbCR statistics, which now
cover more than 50 jurisdictions and 95% of all CbCRs filed (almost 7500 CbCRs). New data
series have also been introduced, including indicators of the impact of expenditure-based tax
incentives for R&D, data on Interest Limitation Rules (ILR) and Controlled Foreign
Company (CFC) rules, and data on Withholding Tax rates.

Action 12 Mandatory Disclosure Rules

BEPS Action 12 provides recommendations for the design of rules to require taxpayers and
advisors to disclose aggressive tax planning arrangements. These recommendations seek a
balance between the need for early information on aggressive tax planning schemes with a
requirement that disclosure is appropriately targeted, enforceable and avoids placing undue
compliance burden on taxpayers.

Action overview

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What is the issue?

It is important for each jurisdiction to obtain in a timely manner information on the tax
compliance and policy risks raised by aggressive tax planning. Action 12 contains
recommendations regarding the design of mandatory disclosure rules for aggressive tax
planning schemes, taking into consideration the administrative and compliance costs for tax
administrations and business and drawing on experiences of countries that have implemented
such rules.
Why does it matter?

The lack of timely, comprehensive and relevant information on aggressive tax planning
strategies is one of the main challenges faced by tax authorities worldwide. This information
is essential to enable governments to quickly respond to tax risks through informed risk
assessment, audits, or changes to legislation or regulations.

What are we doing to solve it?

The 2015 OECD report on Mandatory Disclosure Rules provides a modular framework that
enables countries to design a disclosure regime that fits their need to obtain early information
on potentially aggressive or abusive tax planning schemes, as well as the promoters and users
of such schemes. Where a country wishes to adopt mandatory disclosure rules, the
recommendations provide the necessary flexibility to balance a country’s need for better and
more timely information with the compliance burdens for taxpayers.

The Action 12 report also sets out specific recommendations for rules targeting international
tax schemes, as well as for the development and implementation of more effective
information exchange and co-operation between tax administrations.

What are the results so far?

With the adoption of Council Directive (EU) 2018/822 by EU Member States, there has been
a significant uptake in jurisdictions that now have mandatory disclosure rules. This directive
will result in the reporting of cross-border aggressive tax planning, offshore structures and
Common Reporting Standard avoidance schemes to EU tax authorities. The directive
incorporates the model rules set out in the 2018 OECD report Model Mandatory Disclosure
Rules for CRS Avoidance Arrangements and Opaque Offshore Structures.

Action 13 Country-by-Country Reporting

MINIMUM STANDARD

Under BEPS Action 13, all large multinational enterprises (MNEs) are required to prepare a
country-by-country (CbC) report with aggregate data on the global allocation of income,
profit, taxes paid and economic activity among tax jurisdictions in which it operates. This
CbC report is shared with tax administrations in these jurisdictions, for use in high level
transfer pricing and BEPS risk assessments.

Action overview
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What is the issue?

The lack of quality data on corporate taxation has been a major limitation to measuring the
fiscal and economic effects of tax avoidance, making it difficult for authorities to carry out
transfer pricing assessements on transactions between linked companies and even more
difficult to carry out audits.

What are we doing to solve it?

The BEPS Action 13 report (Transfer Pricing Documentation and Country-by-Country

Reporting) provides a template for multinational enterprises (MNEs) to report annually and
for each tax jurisdiction in which they do business the information set out therein. This report
is called the Country-by-Country (CbC) Report.

To facilitate the implementation of the CbC Reporting standard, the BEPS Action 13 report
includes a CbC Reporting Implementation Package which consists of (i) model
legislation which could be used by countries to require the ultimate parent entity of an MNE
group to file the CbC Report in its jurisdiction of residence including backup filing
requirements and (ii) three model Competent Authority Agreements that could be used to
facilitate implementation of the exchange of CbC Reports, respectively based on the:

1. Multilateral Convention on Administrative Assistance in Tax Matters;

2. Bilateral tax conventions; and
3. Tax Information Exchange Agreements (TIEAs).

The BEPS Action 13 report also included a requirement that the CbC reporting minimum
standard be reviewed from 2020 (the 2020 review). In February 2020, the OECD launched
a public consultation process on matters where its members seek input from stakeholders in
conducting this 2020 review.

What are the results so far?

58 jurisdictions required or permitted the filing of CbC reports for 2016 and more than 110
jurisdictions have law in place introducing a CbC reporting obligation. In addition, as of
October 2022, over 3300 relationships are in place for the exchange of CbC reports between
jurisdictions. This means that substantially every MNE with consolidated group revenue of at
least EUR 750 million is already required to file a CbC report, and the gaps that do remain
are closing.

The first exchanges of CbC reports took place in June 2018 and, with the OECD’s support,
tax administrations are incorporating CbC reports into their tax risk assessment and assurance
processes to understand better the risks posed to their jurisdictions. CbC reports are also at
the heart of other programmes to provide greater tax certainty to MNEs, including the OECD
International Compliance Assurance Programme (ICAP).

The third set of aggregated and anonymised data from CbCRs was released in November
2022 (see Corporate Tax Statistics - Fourth Edition), and provides information on the global
tax and economic activities of nearly 7000 multinational enterprise groups headquartered in
47 jurisdictions and operating across more than 100 jurisdictions worldwide.
Action 14 Mutual Agreement Procedure
MINIMUM STANDARD

The BEPS Action 14 Minimum Standard seeks to improve the resolution of tax-related
disputes between jurisdictions. Inclusive Framework jurisdictions have committed to have
their compliance with the minimum standard reviewed and monitored by its peers through a
robust peer review process that seeks to increase efficiencies and improve the timeliness of
the resolution of double taxation disputes.

Action overview
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What is the issue?

As cross-border business and international labour mobility continues to be commonplace in a

21st century global economy, disputes relating to which jurisdictions can tax what types of
income inevitably arise on occasion.

Many tax treaties between jurisdictions contain a MAP provision providing for a process
used to resolve such disputes. Article 25 of the OECD Model Tax Convention provides a
mechanism, independent from the ordinary legal remedies available under domestic law,
through which the competent authorities of the Contracting States may resolve differences or
difficulties regarding the interpretation or application of the Convention on a mutually-agreed
basis. This mechanism – the mutual agreement procedure – is of fundamental importance to
the proper application and interpretation of tax treaties, notably to ensure that taxpayers
entitled to the benefits of the treaty are not subject to taxation by either of the Contracting
States which is not in accordance with the terms of the treaty.

Despite the widespread existence of this provision in tax treaties, further effort is needed to
ensure that access to MAP is available and that MAP cases are resolved within a reasonable
timeframe and implemented quickly.

Why does it matter?

As novel challenges relating to international taxation surface, the necessity of having robust
dispute resolution processes in place becomes increasingly apparent.

Recent statistics show that tax administrations are closing more cases than ever before.
However, new MAP cases as from 2016 are increasing significantly, thus putting upward
pressure on countries' MAP inventories. Therefore, the total inventory of MAP cases keeps
increasing every year since the number of cases closed has not been able to keep up with the
number of new cases.
While anecdotal evidence suggests that the increase in new cases is due to a range of factors,
it is clear that facilitating the effectiveness and efficiency of MAP between countries is
necessary in order to resolve such cases in a timely manner.

What are we doing to solve it?

The final report on Action 14: Making Dispute Resolution Mechanisms More Effective, which
contains a BEPS minimum standard, was adopted in October 2015. The Action 14 Minimum
Standard consists of 21 elements and 12 best practices, which assess a jurisdiction’s legal and
administrative framework in the following four key areas:

1. preventing disputes;
2. availability and access to MAP;
3. resolution of MAP cases;
4. implementation of MAP agreements.

Along with the adoption of this minimum standard, the BEPS Inclusive Framework members
agreed on:

 a peer review process to evaluate the implementation of this standard and

 to report MAP statistics under a newly developed reporting framework (“MAP
Statistics Reporting Framework”).

The Action 14 peer review process was launched at the end of 2016. The initial peer review
process consisted of two stages, where 82 jurisdictions were reviewed. In stage 1,
jurisdictions’ implementation of the Action 14 Minimum Standard was evaluated and
recommendations were made where jurisdictions have to improve in order to be fully
compliant with the requirements under this standard. The follow-up of the recommendations
was measured in stage 2 of the process. Following the conclusion of the initial peer review
process in 2022, a continued monitoring process has started whereby all Inclusive Framework
member jurisdictions will be subject to continued monitoring: jurisdictions that have
"meaningful MAP experience" would undergo a full peer review process from 2024 once
every four years and those that do not would undergo a two-stage simplified peer review
process from 2023.

What are the results so far?

Initital peer review process

In February 2021, the final batch of Action 14 stage 1 mutual agreement procedures (MAP)
peer review reports were published. Of the more than 1750 recommendations made, about
66% (+/- 1150) relate to deficiencies in tax treaties with respect to the MAP article. Around
34% (+/- 600) of the recommendations relate to MAP practices and policies that are not in
line with the minimum standard. In addition, there are almost 400 recommendations for
jurisdictions to continue practices that were already in line with the minimum standard.
The Action 14 minimum standard has had a broader impact on MAP and tax certainty more
broadly, and many countries are working to address deficiencies identified in their respective
reports. For example:

 The peer review process has spurred on changes regarding the structure and
organisation of competent authorities to streamline better their processes for resolving
MAP cases in a timely manner.
 There has been a significant increase in the number of closed cases in almost all
jurisdictions under review. This is likely the result of an increase in resources or of a
more efficient use of resources by competent authorities due to (or in anticipation of)
the peer review process.
 The number of Inclusive Framework MAP profiles continues to increase, and now
covers over 100 jurisdictions. This central repository of easily accessible information
for taxpayers will facilitate their use of MAP.
 An increasing number of jurisdictions have introduced or updated comprehensive
MAP guidance to provide taxpayers with clear rules and guidelines on MAP.
 Access to MAP is now granted for transfer pricing cases even where the treaty does
not contain Article 9(2) of the OECD Model Tax Convention, especially in those
jurisdictions that did not provide access to MAP in such cases in the past.

In addition to these broader changes, the monitoring process under stage 2 has now been
completed. Stage 2 reports for the 82 jurisdictions that were peer reviewed in batches 1-10
have been published from August 2019 until September 2022. These stage 2 reports offer a
first glimpse into how well jurisdictions are implementing the specific recommendations
issued to them during stage 1 of the peer review process.

The results of this stage 2 monitoring process show that jurisdictions are making tangible
progress. For the 82 jurisdictions reviewed in stage 2, many have improved their performance
with respect to the prevention of disputes, the availability of and access to MAP, the
resolution of MAP cases and the implementation of MAP agreements. This progress is also
reflected in the developments set out below:

 In addition to bilateral treaty changes, the MLI was signed and ratified by most of the
jurisdictions, which brings a substantial number of their treaties in line with the
standard.
 Almost all jurisdictions have either introduced or updated publicly available MAP
guidance to provide more clarity and details to taxpayers.
 Most of the jurisdictions decreased the amount of time needed to close MAP cases
and a majority of these jurisdictions met or were close to the sought-after 24-month
average timeframe to close MAP cases.
 Following legislative or policy-related changes or the impact of the Multilateral
Instrument since stage 1, several of these jurisdictions are now able to implement
MAP agreements notwithstanding their domestic time limits.

There is still work to be done to bring the tax treaties of reviewed jurisdictions in line with
the Action 14 minimum standard. Many of the assessed jurisdictions have, however, made
substantial progress in updating their treaty networks, including through the prioritisation of
tax treaty negotiations when treaties are not expected to be modified by the MLI.
Continued monitoring

Results from the continued monitoring process described above will be made available once
the first batch of peer review reports are published.

Action 15 Multilateral Instrument

The Multilateral Instrument (BEPS MLI) offers concrete solutions for governments to close
loopholes in international tax treaties by transposing results from the BEPS Project into
bilateral tax treaties worldwide. The BEPS MLI allows governments to implement agreed
minimum standards to counter treaty abuse and to improve dispute resolution mechanisms
while providing flexibility to accommodate specific tax treaty policies.

Action overview

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How does it work?

The Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base
Erosion and Profit Shifting ("Multilateral Instrument" or "BEPS MLI") allows governments
to modify existing bilateral tax treaties in a synchronised and efficient manner to implement
the tax treaty measures developed during the BEPS Project, without the need to expend
resources renegotiating each treaty bilaterally.

INFORMATION BROCHURE

How many jurisdictions have joined the Multilateral Instrument?

In November 2016, over 100 jurisdictions concluded negotiations on the BEPS MLI that will
swiftly implement a series of tax treaty measures to update international tax rules and lessen
the opportunity for tax avoidance by multinational enterprises. The BEPS MLI already covers
over 100 jurisdictions and entered into force on 1 July 2018. Signatories include jurisdictions
from all continents and all levels of development and other jurisdictions are also actively
working towards signature.

SIGNATORIES AND PARTIES

When will the Multilateral Instrument take effect?

The BEPS MLI entered into force on 1 July 2018 and its provisions entered into effect for the
first provisions on 1 January 2019. More information on entry into force and effect for each
Party and their Covered Tax Agreements can be found in the list of Signatories and
Parties (BEPS MLI Positions) and the BEPS MLI Toolkit & Database.
TOOLKIT & DATABASE

In which languages is the Multilateral Instrument available?

Only the signed English and French versions are the authentic BEPS MLI texts applicable.
Members of the "ad hoc Group" that negotiated the BEPS MLI have translated it
into Arabic, Bulgarian, Chinese, Dutch, German, Greek, Italian, Japanese, Portuguese, Serbia
n, Spanish and Swedish. These translations of the BEPS MLI in other languages are provided
only for information purposes.