MULTILATERAL CONVENTION TO IMPLEMENT TAX TREATY–RELATED MEASURES

TO PREVENT BASE EROSION AND PROFIT SHIFTING

The rule has been published providing that, as of October 1, 2025, the Multilateral Convention to Implement Tax Treaty-Related Measures to Prevent Base Erosion and Profit Shifting will enter into force, more commonly known as the MLI.

This Convention is a multilateral international treaty that makes it possible to adopt the changes planned under the BEPS Project without the need to negotiate and renegotiate each bilateral double tax treaty (DTA) individually (“CDIs”). As a general rule, DTAs are not updated automatically; they require bilateral consent. The MLI seeks to ensure that DTAs are interpreted to eliminate double taxation in respect of the taxes covered by those treaties, without creating opportunities for non-taxation or reduced taxation through tax avoidance and tax evasion.

The only treaties covered or affected by the MLI are those signed with Canada, Chile, Mexico, South Korea, and Portugal. Not included are those entered into with Brazil (has not signed the MLI), Switzerland (has not considered the DTA with Peru as a covered agreement), Japan, or Andean Community Decision 578.

Although the MLI enters into force as of October 1, 2025, for withholding taxes it will take effect as of January 1, 2026.

To view the full publication, please click the following link: https://bit.ly/45x0vtu