The OECD’s Multilateral Convention to implement tax treaty-related measures to prevent base erosion and profit shifting (BEPS MLI) will enter into force in Australia in January 2019.
The BEPS MLI, negotiated by over 100 countries and jurisdictions, updates the existing network of tax treaties and reduces opportunities for MNE tax avoidance. The BEPS MLI seeks to modify existing bilateral tax treaties to swiftly implement measures relating to hybrid mismatch arrangements, treaty abuse, and permanent establishment.
From January 1, 2019, the BEPS MLI will operate to modify six of Australia’s 44 bilateral tax treaties. These include tax treaties with France, Japan, New Zealand, Poland, the Slovak Republic, and the UK.
At the time of ratification in September 2018, the Australian Government noted that it would cover 42 of its existing tax treaties under the BEPS MLI.
More Australian tax treaties will be modified in the future, following the ratification of the BEPS MLI by other countries, the Australian Treasury noted.