Significant Tax Treaty Changes Proposed In Multilateral Convention

On November 24, 2016, the OECD released a multilateral convention (the multilateral instrument or MLI [PDF]) together with a detailed Explanatory Statement [PDF]. The release of the MLI follows negotiations involving more than 100 jurisdictions, including Canada. The purpose of the MLI is to allow swift implementation of a series of tax treaty measures that were contained in the OECD/G20 Base Erosion and Profit Shifting (BEPS) Project. Once in effect, the MLI may have a significant impact on Canada's existing bilateral tax treaties. Effects may include the denial of certain tax treaty benefits, the reallocation of certain taxing rights, and the modification of existing dispute resolution procedures.