Convention to Implement Measures to Prevent BEPS (MLI)

1. Outline
- The MLI is intended to introduce the tax treaty related measures, which are part of the measures developed under the BEPS project, into the existing tax treaties between the Parties to the MLI.
- The MLI enables the Parties to implement the tax treaty related measures to prevent BEPS with respect to a large number of their existing tax treaties at the same time and in an efficient manner.
- Measures to prevent BEPS introduced into the existing tax treaties by the MLI consist of (i) measures to prevent tax avoidance conducted through abuse of tax treaties and (ii) measures to eliminate uncertainty for taxpayers such as elimination of double taxation.
- Each of the Parties to the MLI may choose all or part of its existing tax treaties as to be covered by the MLI and under specified conditions all or part of provisions of the MLI regarding the tax treaty related measures to prevent BEPS as to be applicable to their existing tax treaties.

2. Background
- September 2014：In the reports of the BEPS project, it was recommended to develop a mandate for the formation of an ad hoc Group for the development of a multilateral instrument.
- November 24, 2016：The text of the MLI was adopted by the members of the ad hoc Group.
- June 7, 2017：67 jurisdictions including Japan signed the MLI at the signing ceremony held at Paris.
- May 18, 2018：The MLI was approved at the 196th session of the Diet in Japan.
- July 1, 2018：The MLI entered into force for the first 5 jurisdictions that had deposited the instruments of ratification thereof. Hereafter the MLI will enter into force for each of the jurisdictions that subsequently deposits the instrument of ratification.
- September 26, 2018：Japan deposited the instrument of acceptance. Accordingly, the MLI entered into force on January 1, 2019 for Japan.
- As of October 2, 2024：102 jurisdictions have signed the MLI. 85 of them have deposited the instruments of ratification, acceptance or approval of the MLI.

1. Measures to Prevent BEPS introduced by the MLI
  Measures to prevent BEPS introduced into the existing tax treaties by the MLI consist of (i) measures to prevent tax avoidance conducted through abuse of tax treaties and (ii) measures to eliminate uncertainty for taxpayers such as elimination of double taxation, which include the tax treaty related measures to prevent BEPS recommended by the final reports of the following Actions of the BEPS project.
2. Tax Treaties covered by the MLI
  Each of the Parties to the MLI may choose all or part of its existing tax treaties as to be covered by the MLI.
  The MLI will apply only to a tax treaty all of the parties to which have chosen that tax treaty as to be covered by the MLI, and will not apply to a tax treaty either party to which is not the Party to the MLI nor has chosen that tax treaty as such.

3. Choice and Application of Measures to Prevent BEPS
  Each of the Parties to the MLI may choose under specified conditions all or part of provisions of the MLI regarding the tax treaty related measures to prevent BEPS as to be applicable to their existing tax treaties.
  Provisions of the MLI, in principle, will apply only to tax treaties all of the parties to which have chosen such provisions as to be applicable to their tax treaties, and will not apply to tax treaties either party to which has not chosen those provisions as such.
  The provisions of the MLI chosen to be applied by a Party to the MLI, in principle, will apply to all of its tax treaties covered by the MLI, and a Party cannot choose to or not to apply such provisions only to its particular tax treaties.
  The provisions of the MLI regarding the tax treaty related measures to prevent BEPS will, where applicable, apply in place of the similar provisions of the existing tax treaties or in addition to the provisions thereof in the absence of such similar provisions.

4. Notification of Choices
  Each of the Parties to the MLI must notify the Depositary of the MLI (the Secretary-General of the OECD) of (i) a list of existing tax treaties to be covered by the MLI and (ii) a list of provisions of the MLI regarding the tax treaty related measures to prevent BEPS to be applicable to its tax treaties at time of either of the signature to the MLI or of the ratification, acceptance or approval of the MLI. A Party to the MLI which does not make such notification at the time of the signature to the MLI must submit provisional lists of them at that time. Each of the Parties to the MLI may extend at any time the list of existing tax treaties to be covered by the MLI.
  The Depositary will make public the notifications and submissions from each of the Parties to the MLI.

 

  The followings are the outline of the contents of the list regarding Japan's choices of application of the MLI. 
 
1. Jurisdictions which are Parties to the Tax Treaties chosen by Japan as to be Covered by the MLI (43 Jurisdictions)

Australia	Germany	Korea	Pakistan	Sweden
Bulgaria	Hong Kong	Kuwait	Poland	Thailand
Canada	Hungary	Luxembourg	Portugal	Turkey
China	India	Malaysia	Qatar	Ukraine
Czech Republic	Indonesia	Mexico	Romania	United Arab Emirates
Egypt	Ireland	Netherlands	Saudi Arabia	United Kingdom
Fiji	Israel	New Zealand	Singapore	Viet Nam
Finland	Italy	Norway	Slovakia
France	Kazakhstan	Oman	South Africa

 

 
2. Provisions of the MLI chosen to apply by Japan