26 November 2016
Media Release - #2016104, 2016

In the role of: Minister for Revenue and Financial Services [19 July 2016 - 28 August 2018]

OECD finalises new multilateral convention on tax avoidance

The Organisation for Economic Co -Operation and Development (OECD) has released the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (the Convention).

This represents another significant step in the global fight against multinational tax avoidance and the completion of the final action of the OECD/G20 Base Erosion and Profit Shifting (BEPS) Project.

The objective of the Convention is to enable countries, like Australia, to swiftly modify their bilateral tax treaties to implement the OECD/G20 BEPS recommendations.

The Minister for Revenue and Financial Services, the Hon Kelly O’Dwyer MP, said the Turnbull Government is continuing to implement strong measures to make multinationals pay the right amount of tax in Australia.

“Last year we successfully introduced our landmark Multinational Anti-Avoidance Law (MAAL) to crack down on multinational tax avoidance despite Labor’s opposition,” Minister O’Dwyer said.

“Significant action has also been taken in our last two Budgets to toughen our domestic tax integrity rules and adopt the BEPS recommendations. This includes establishing the Tax Avoidance Taskforce which has strengthened the Australian Taxation Office’s audit and compliance functions, and will raise $3.7 billion in additional revenue.”

Australia has actively participated in the development of the Convention, which will build on these domestic measures to strengthen the international tax system and level the playing field for domestic businesses.

The Convention will introduce a range of tax integrity rules developed during the BEPS project to close tax loopholes exploited by multinational companies, thereby strengthening tax treaties that facilitate global trade and investment.

“The Convention will introduce these tax treaty integrity measures into potentially more than 3,000 existing tax treaties around the world.  In the absence of the Convention, countries would have to introduce the new rules treaty by treaty which could take decades. Treasury will release a discussion paper on the Convention shortly, and I encourage interested stakeholders to make a submission,” Minister O’Dwyer said.

The Convention and its Explanatory Statement are available on the OECD’s website.