International Tax Developments
On 7 June, officials from more than 60 jurisdictions signed the BEPS Multilateral Convention which will transplant a number of measures in respect of Action 2 (Hybrid Mismatches), Action 6 (Treaty Abuse), Action 7 (Avoidance of Permanent Establishments) and Action 14 (Improving Dispute Resolution) directly into each signatory jurisdiction's existing network of bilateral tax treaties.
However, it is worth noting that a number of the provisions in the Convention include elements of choice (e.g. in relation to Action 6 (Treaty Abuse) amendments, signatory jurisdictions can choose to include (i) a principal purpose test, (ii) a simplified limitation of benefits provision or (iii) a detailed limitation of benefits provision along with either rules addressing conduit financing structures or a principal purpose test). It remains to be seen which approach each signatory jurisdiction will take in relation to these provisions although the UK has indicated its preference for the principal purpose test only.