The Ratification of Multilateral Instrument (MLI) by the Cyprus Government
The MLI is an instrument introduced by OECD/G20 that enables jurisdictions to instantly amend their bilateral tax treaties to implement measures designed to better address multinational tax avoidance. The Cyprus Government ratified the MLI on 22 January 2020. Further, the Cyprus position on the minimum standards of the MLI and the Explanatory Statement were published.
The Ratification form was signed by the Minister of Affairs Mr. Nikos Christodoulides on behalf of the Republic of Cyprus.
The purpose of the MLI is to immediately amend the existing bilateral tax treaties, providing consistency. In order to ensure the minimum required compliance of the Country, Cyprus has approved the embodiment of Action 6 (Purpose of Covered Tax Agreement), Action 7 (Prevention of Treaty Benefit) and Action 14 (Making Dispute Resolution Mechanisms More Effective). In effect the double tax treaties of Cyprus will be amended to include these provisions without further bilateral negotiations provided the other jurisdiction of the treaty has accepted the same provisions as with Cyprus.
The completion of the domestic procedures for the instrument to enter into force was made with the publication of the above-mentioned documents in the official gazette of the Republic of Cyprus and their deposition with the Secretariat of the OECD as the depositary of the Multilateral Instrument.