Some but not all double tax treaties are being amended by the Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (the multilateral instrument or MLI). This article examines the application of the MLI to a given scenario, in the context of DTTs generally. Broadly, in applying a double tax treaty, one now needs to: locate the relevant treaty; check whether and when each party to the DTT ratified the MLI to establish: (i) when it comes into force; and (ii) when the provisions take effect; use the OECD online tool to establish which provisions of the MLI apply to the DTT; and apply the DTT, as amended by the MLI, to the facts. Applying these steps in practice may not be as straightforward as first appears.
