The Norwegian Government has submitted to the Parliament a proposal to ratify the OECD’s Multilateral Instrument to implement tax treaty-related measures to tackle 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).
The BEPS Convention will modify existing bilateral tax treaties to swiftly implement the tax treaty measures developed in the course of the BEPS project. Treaty measures that are included in the BEPS Convention include those on hybrid mismatch arrangements, treaty abuse, and permanent establishment.
The BEPS Convention entered into force on July 1, 2018. It now covers 84 jurisdictions and will become effective on January 1, 2019, for the first 47 tax treaties concluded among the 15 jurisdictions that deposited their acceptance or ratification instrument.
The Government has to complete the ratification process and submit its ratification instrument to the OECD for the BEPS Convention to apply to Norway’s covered tax treaties.