Cyprus will sign the Multilateral Instrument of the OECD on the 7th of June 2017

The Cyprus government declared its intent to sign the ‘Multilateral convention to implement tax treaty related measures to prevent Base Erosion and Profit Shifting’ (Multilateral Instrument) of the OECD in setting minimum standards on Double Tax Treaties.

The Ministry of Finance issued a press release stating that everything has been approved by the Council of Ministers and the signing will take place in Paris on the 7th of June. The approval of the Multilateral Agreement will safeguard and update existing Double Tax Agreements through the integration of the two minimum standards of Action 6 and the minimum standard of Action 14 of the BEPS project.  Action 6 refers to Treaty Abuse and Action 14 refers to making dispute resolution mechanisms more effective.

OECD’s Ad Hoc Committee was formed to conform to Action 15 (developing a Multilateral Instrument) and it is one of the 15 actions of BEPS issued by the OECD and the G20 in October 2015. It comprises of more than 100 tax jurisdictions including Cyprus and it was responsible for preparing the Multilateral Instrument and the Explanatory Statement that regulates and establishes the minimum standards for existing and new Double Tax Treaties. The formation of the Multilateral Instrument will allow countries to quickly amend their tax treaties and apply BEPS recommendations.