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Ireland’s Government has signed an Order to facilitate ratification of the OECD’s Multilateral Instrument to implement tax treaty-related measures to prevent base erosion and profit shifting (BEPS).
The BEPS Convention, negotiated by over 100 countries and jurisdictions, updates the existing network of bilateral tax treaties and reduces opportunities for tax avoidance by multinational enterprises (MNEs). Ireland signed the BEPS Convention in June 2017.
The BEPS Convention seeks to modify existing bilateral tax treaties to swiftly implement measures relating to hybrid mismatch arrangements, treaty abuse, and permanent establishment. The BEPS Convention also strengthens provisions to resolve treaty disputes, including through mandatory binding arbitration, which has been taken up by over 25 countries, including Ireland.
Welcoming the signing of the Order, Finance Minister Paschal Donohoe said: “This is an important step in our work to ratify the BEPS Multilateral Convention. Once fully ratified this will introduce an important anti-abuse clause into our double taxation treaties, of which we have 74 in existence, and ensure that Ireland is meeting our commitments under the BEPS project.”
The Minister added: “Ensuring that a more level-playing field exists and that, by working together, appropriate standards are set internationally, is key to tackling aggressive tax planning and ensuring that MNEs pay their fair share of tax. This progress marks another step in delivering the program of corporate tax reform, which is detailed in Ireland’s Corporation Tax Roadmap, and which I published just last month, and points to the direction of travel set by the Irish Government in this area for the years ahead.”
The Order would soon be deposited with the OECD, completing Ireland’s ratification of the BEPS Convention.