BEPS Action 15: Multilateral Convention to Implement Tax Treaty Related Measures to Prevent BEPS (MLI)

BEPS Action 15 developed the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (MLI), enabling BEPS measures to be incorporated into the global network of bilateral tax treaties without requiring individual renegotiation. The MLI is an international treaty that modifies existing bilateral tax treaties through an overlay technique.

The instrument covers BEPS actions requiring treaty changes, notably the minimum standards on treaty abuse (Action 6) and dispute resolution (Action 14), as well as optional provisions on hybrid mismatch arrangements (Action 2) and artificial avoidance of permanent establishment status (Action 7).

By 2025, over 100 jurisdictions have signed the MLI, with the majority having also ratified the convention and brought it into force. More than 1,800 existing bilateral tax treaties are modified by the MLI.

Development of a multilateral instrument was set as an ambitious goal in the 2013 BEPS Action Plan. Following publication of the BEPS final reports, an ad hoc group of more than 100 countries and jurisdictions was established in November 2015 and worked on the MLI text until November 2016. The MLI was finalised on 24 November 2016 and signed by 68 jurisdictions in Paris on 7 June 2017 — the largest simultaneous signing event for a tax treaty. It entered into force on 1 July 2018. By 2025, more than 100 jurisdictions have signed the MLI, and over 1,800 treaties have been or will be modified by it.

The MLI modifies existing bilateral tax treaties of signatory jurisdictions (Covered Tax Agreements, CTAs). Each jurisdiction notifies which treaties it wishes to cover, along with reservations and options. Core provisions (minimum standards) are mandatory; many other articles are optional or may be excluded via reservation. The MLI does not create standalone tax rules; it only amends existing CTAs.

An MLI provision takes effect for a particular treaty only when both contracting jurisdictions have opted in for the same article and neither has entered a reservation (the so-called ‘matching mechanism’). This ensures that modifications only apply where both parties agree.

The MLI remains the authoritative instrument for implementing BEPS Actions 2, 6, 7, and 14 into existing tax treaties. For the planned reallocation of taxing rights under Pillar One, a separate Multilateral Convention (MLC) is envisaged that would supplement the MLI.

• Signing and ratification of the MLI by jurisdictions
• Notification of tax treaties to be covered (CTAs)
• Mandatory implementation of minimum standards (Actions 6 and 14)
• Election of optional provisions on hybrid mismatches and permanent establishments
• Filing of reservations on individual articles within the MLI framework
• Depositing ratification instrument with the OECD Secretary-General
• Ongoing updates to notifications as treaties are amended

2 corrections:
- 68 original signatories, not 67
- Official URL outdated after OECD website relaunch
2 updates:
- Missing ratification vs. signature distinction
- last_amended date misleading (MLI text unchanged since 2016)
5 clarifications.
2 notes.