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Cyprus to sign multilateral tax agreement

12/04/2017 17:15
The Republic of Cyprus along with 100 other jurisdictions participated in the OECD Ad-hoc Committee, which was established in November 2015 for the preparation of the Multilateral Instrument and the Explanatory Statement which regulates and establish among others provisions the minimum standards for both existing and for the new Double Tax Treaties.

According to an announcement by the Ministry of Finance, the OECD Ad-hoc Committee was established in accordance with Action 15 ‘Develop a Multilateral Instrument’ one of the 15 actions of the Base Erosion and Profit Shifting project (BEPS) which issued the OECD / G20 in October 2015.

Action 15 of the BEPS Project analysed the possibility of developing a multilateral instrument in order to allow countries to swiftly amend their tax treaties to implement the tax treaty-related BEPS recommendations.

The Council of Ministers on April 5th, 2017, approved the signing of the 'Multilateral Instrument', which is scheduled to take place in Paris on June 7th 2017.

The ratification of the Multilateral Agreement will pave the way for updating all existing Double Tax Agreements by incorporating the two minimum standards of Action 6 (Treaty Abuse) and the minimum standard of Action 14 (Making Dispute Resolution Mechanisms More Effective) of BEPS project in the context of safeguarding and orderly application of the existing Double Tax Agreements.