Czech Republic implements MLI into double taxation treaties

The Czech Republic has joined the states that have deposited their instruments of ratification for the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (MLI, short for multilateral instrument) in Paris this year, thereby pledging to gradually implement the adopted principles into 52 double taxation treaties with states also having ratified the MLI.

The MLI is a collective instrument whose standards are subsequently implemented into double taxation treaties bilaterally concluded between the states that have decided to apply the MLI.
The Czech Republic only joined the convention to the extent of the minimum standard including the rule to prevent treaty abuse (principal purpose test, PPT) and the rule to allow for the effective resolution of disputes by mutual agreement (dispute resolution). 

The adopted principles will gradually be implemented into the 52 double taxation treaties the Czech Republic has so far entered into. The Czech Ministry of Finance publishes amendments to relevant treaties in form of communications on treaties in its Financial Bulletin. To date, amendments associated with the implementation of the MLI into the double taxation treaties between the CR and Poland, Austria, Latvia, Serbia and Montenegro, Lithuania, Japan, Australia, Canada, Slovakia, Ireland, and Malta have been made public. 


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