INSIGHT: What is the MLI and Why Does it Matter?

The Multilateral Convention to Implement Tax Treaty Related Measures to Prevent BEPS (“MLI”) is an agreement by over 70 countries which will enable over 1,000 double tax treaties to be interpreted in a way that implements the recommendations of the Organisation for Economic Cooperation & Development (“OECD”) which require changes to double tax treaties. The changes relate to hybrid mismatches, treaty abuse, artificial avoidance of permanent establishments and improving dispute resolution. This is part of the OECD’s base erosion and profit shifting (“BEPS”) project to prevent international tax avoidance by multinational companies.

All members of the OECD are obliged to ...