By Swann Collins, investor, writer and consultant in international affairs – Eurasia Business News, December 16, 2021

View on Seychelles islands, in Indian Ocean. Seychelles are known for providing easy registration process for companies, and low tax burden – Photo credit : Pexel.

Seychelles deposited its instrument of ratification of the Multilateral Convention for the Implementation of Measures Relating to Tax Treaties to Prevent Base Erosion and Profit Shifting (the Multilateral BEPS Convention, adopted by OECD in 2016), which now covers more than 1,700 bilateral tax treaties. Seychelles underscore their strong commitment for preventing the abuse of tax treaties and base erosion and profit shifting (BEPS) by multinational companies. For Seychelles, the OECD Multilateral Convention will enter into force on April 1, 2022.

That means that all international companies registered in Seychelles will fall under OECD BEPS Tax Convention from April 2022.

Seychelles are known for providing easy registration process for offshore companies, trusts and investment fund and low tax burden. In May 2021 the European Union decided to remove Seychelles from its official blacklist of tax havens.

Iceland has also filed new notifications under the Multilateral BEPS Tax Convention after its ratification of the Convention in 2019. The BEPS Convention entered into force on 1 st January 2020 for Iceland. New notifications from Iceland will take effect in accordance with Articles 29 and 35 of the Multilateral Convention. The Iceland corporate income tax rate is 20% for  for limited liability companies (LLCs) and limited partnership companies.

The Multilateral BEPS Convention was developed within the framework of the OECD.

This international treaty offers concrete solutions to States parties to improve current international rules by transposing the measures developed within the framework of  the BEPS Project of the OECD and the G20  into bilateral tax treaties. The BEPS Convention modifies the application of thousands of concluded bilateral tax treaties in order to eliminate situations of double taxation. It also implements the minimum standards adopted in order to prevent the abusive use of tax treaties , use likely to distort competition between local and transnational companies. Finally, the objective of the convention is to improve the settlement of disputes. while maintaining a sufficient degree of flexibility to take into account specific tax policies relating to tax treaties.

The BEPS Multilateral Convention has already started to impact the bilateral tax treaties of the 68 jurisdictions that have ratified it. As of January 1, 2022, it will changed the application of more than 860 tax conventions concluded between these 68 jurisdictions, and the application of 900 additional tax conventions should be modified once the OECD Multilateral Convention is ratified by all the signatories, bringing thus to 1750 the total number of modified tax treaties in the world.

In international law, once a treaty is signed by a State, it must ratify it for it to enter into force with regard to it. Usually, ratification needs a vote by the State’s Parliament.

The text of the BEPS Convention, the explanatory memorandum, general information, the database and the positions of each signatory are available on the OECD website by the following link.

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© Copyright 2021 – Swann Collins, investor and consultant in global affairs.