A multilateral convention signed with 10 countries came into effect on 1 January 2019

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The Multilateral Convention, also known as the Multilateral Instrument (MLI), is a multilateral contractual tool, which constitutes part of the OECD Action Plan on Base Erosion and Profit Shifting (“BEPS”). The convention allows for the rapid implementation of BEPS measures in individual bilateral double taxation treaties without the need for individual changes in separate contracts, thus effectively helping to prevent income tax evasion.

The MLI contains the following measures:

  • neutralisation of the effects of mismatch arrangements,
  • prevention of advantages arising from double taxation treaties in unfair situations,
  • to prevent the creation/existence of permanent establishment status,
  • a mechanism for resolving disputes concerning taxation.

Slovakia became a signatory of the MLI on 7 June 2018, the president of Slovakia ratified the MLI on 30 July 2018, and the MLI entered into force for Slovakia from 1 January 2019.

However, the convention will only affect double taxation agreements entered into with countries, which have also ratified the MLI. At present (i.e. with effect as of 1 January 2019) it concerns agreements entered into between Slovakia and Australia, France, Israel, Japan, Lithuania, Poland, Austria, Slovenia, Serbia and the United Kingdom and Northern Ireland.

Since the MLI modifies bilateral double taxation treaties, the impact on individual treaties in terms of reservations and declarations of both parties asserted upon ratification shall be made public in separate communications from the Ministry of Foreign and European Affairs of the Slovak Republic in the interest of ensuring greater certainty.

An explanatory statement, which can be inspected at the MFSR, has been issued for the convention. Reservations and declarations put forward by Slovakia in relation to the convention can also be inspected at the MFSR.


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