On 7 June 2017, Ireland was one of 68 countries to sign the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Sharing (the ‘MLI’) at a ceremony hosted by the Organisation for Economic Co-Operation and Development (‘OECD’) in Paris. The MLI will allow for the amendment of existing global tax treaties in one streamlined legislative process. As the first multilateral treaty of its kind, it represents a significant development in international tax law.
The MLI has resulted from the OECD/G20 Base Erosion and Profit Sharing (‘BEPS’) project which made a number of recommendations for changes to international tax treaties concerning matters such as dispute resolution, common approaches and minimum standards.
Ireland currently has 72 double tax treaties (‘DTTs’) in effect. The effect of the MLI will be to allow Ireland to amend its existing DTTs and incorporate the BEPS recommendations without the need to re-negotiate its bilateral DTTs. As the existing DTT between Ireland and the Netherlands is currently being re-negotiated, it has been agreed that this DTT will not be covered by the MLI.
It is not yet known when the changes will take effect as there are a number of stages in the ratification process which must first take place. Ireland's DTTs will be amended where both Ireland and the relevant treaty partner have fully ratified the MLI into their domestic law.