Internationally active companies with a turnover of more than EUR 750 million should soon no longer be able to shift their profits to avoid paying tax. The multilateral convention to implement tax treaty-related measures to prevent base erosion and profit shifting (BEPS) should prevent these previously legal practices to minimise tax.
On Wednesday, representatives of 76 states and territories signed the convention at the headquarters of the Organisation for Economic Co-operation and Development (OECD) in Paris, according to an OECD statement. The convention defines minimum standards to be implemented either directly or bilaterally into the double taxation agreement. This will complement the preambles of the double taxation agreement accordingly, with the agreement itself containing abuse clauses.
Liechtenstein is among the countries who signed the convention on Wednesday. According to the documents the country submitted to the OECD, it will first use the BEPS agreement within 15 bilateral agreements – among them the double taxation agreements with Germany, Switzerland and Great Britain.
Last year, Liechtenstein deposited with the OECD its instrument of ratification for the agreement on mutual assistance in tax matters – one of the requirements for participation in the OECD’s BEPS project.