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Luxembourg Ratifies BEPS Multilateral Instrument

Monday, April 15, 2019

Enhancements to Luxembourg's network of double tax agreements to mitigate base erosion and profit shifting will become effective from August 1, 2019.

On April 9, 2019, the territory ratified the BEPS multilateral instrument, the OECD has announced.

The BEPS MLI, developed through negotiations involving more than 100 countries and jurisdictions as part of the OECD's BEPS project, is intended to enable countries to incorporate BEPS-related amendments into their tax treaties without having to renegotiate bilateral treaties on a piecemeal basis.

The instrument will implement minimum standards to counter treaty abuse (BEPS Action 6), prevent the artificial avoidance of permanent establishment status (BEPS Action 7), neutralize the effects of hybrid mismatch arrangements (BEPS Action 2), and improve dispute resolution mechanisms (BEPS Action 14).