Denmark ratifies BEPS MLI to tackle MNE tax avoidance

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Denmark ratifies BEPS MLI to tackle tax avoidance

For Denmark the BEPS MLI will enter into force on January 1, 2020.

Denmark ratifies BEPS MLI to tackle MNE tax avoidance

On September 30, 2019, Denmark deposited with the OECD the Instrument of Ratification for the Multilateral Convention to implement tax treaty-related measures to prevent base erosion and profit shifting (BEPS MLI).

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.

The BEPS MLI also strengthens provisions to resolve treaty disputes, including through mandatory binding arbitration, which has been taken up by over 25 countries.

Denmark signed the BEPS MLI in June 2017. Denmark intends to cover 64 of its existing tax treaties under the BEPS MLI.

The BEPS MLI will enter into force for Denmark on January 1, 2020.