Multilateral Convention modifies Australia’s Bilateral Tax Treaties

by | Feb 14, 2019

The Multilateral Convention agreed between OECD member states is intended to swiftly redress BEPS tax avoidance utilising Double Tax Agreements. It is now rapidly covering Australia’s DTAs.


The Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting is a convention agreed between OECD member states to achieve the purpose indicated by its title in a swift, co-ordinated and consistent way.


Australia has notified the OECD that all its DTAs are to be subject to automatic modification under the MC.


The MC entered “into force” in Australia on 1 January 2019 and on that date entered “into effect” for our DTAs with France, Japan, New Zealand, Poland, the Slovak Republic and the UK. By 1 July this year, the MC will have entered into effect also for our DTAs with Finland, Ireland, Malta and Singapore.


MC provisions relating to Purpose (Art. 6), Prevention of Treaty Abuse (Art. 7), Mutual Agreement Procedure (Art. 16) and Corresponding Adjustments (Art. 17) are mandated changes upon entry into effect of the MC for a DTA. The modifications for other MC provisions are subject to reservations that have been made by Australia and have been or may be made by the DTA treaty partner in each case. Australia has made limited, but not insignificant, reservations to the MC.


All Australian enterprises doing business in or with any of Australia’s treaty partners and all enterprises of those countries doing business in of with Australia, should carefully review the impact of the MC on their operations.

Contact Don Green or Chris Gibbs at ICGTAX to discuss the impact of the MC on your company or to discuss any other tax issues your company is considering.
+612 8599 8320


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