Barbados Deposits Its Instrument of Ratification for the Multilateral BEPS Convention
On December 21, 2020, the Government of Barbados deposited its instrument of ratification for the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (Multilateral Convention or MLI). The Multilateral Convention will enter into force on April 1, 2021.
According to the Organisation for Economic Co-operation and Development, the MLI offers concrete solutions for governments to close loopholes in international tax treaties by transposing results from the Base Erosion and Profit Shifting (BEPS) Project into bilateral tax treaties worldwide.
The MLI allows governments to implement agreed minimum standards to counter treaty abuse and to improve dispute resolution mechanisms while providing flexibility to accommodate specific tax treaty policies.
As such, the MLI allows governments to modify existing bilateral tax treaties in a synchronised and efficient manner to implement the tax treaty measures developed during the BEPS Project, without the need to expend resources renegotiating each treaty bilaterally.
The Multilateral Convention and Barbados’ Position Paper on the Multilateral Convention is available on the Barbados Revenue Authority website. The Authority will issue a Guidance Note for the MLI in due course.