Most contracts use the location of the actual management of a unit as a key Tiebreaker test to determine the country of tax residence of a double residence for contractual purposes. This test is in addition to other factors and allows both tax authorities to agree on a single country of residence. Australia adopted Article 4, but not the rule that would allow both tax administrations to grant contractual benefits in the absence of such an agreement. Based on the conclusion of these procedures by Australia and its partners, the multilateral instrument has amended a series of bilateral tax treaties in Australia. Data on which the multilateral instrument has amended bilateral tax treaties in Australia are subject to income tax. Other bilateral agreements in Australia are expected to change over time when other countries conclude these processes. More information on the multilateral instrument, its motivations and Australia`s final adoption positions are available on the OECD website. On the basis of current positions or jurisdictions that have not signed the MLI, contracts that have not been amended by the MLI include: Australia has adopted Article 4, but has not adopted the rule that would allow both tax administrations to grant contractual benefits in the absence of such an agreement. On September 26, 2018, Australia ratified the Multilateral Convention for the Implementation of Measures to Prevent Base Erosion and Profit Transfer (Multilateral Instrument) by Tabling the Ratification, Acceptance or Approval Instrument with the Paris Organisation for Economic Co-operation and Development.

The multilateral instrument came into force for Australia on January 1, 2019. The multilateral instrument is a multilateral treaty that allows legal systems to rapidly amend their bilateral tax treaties to implement measures to improve the fight against multinational tax evasion. These measures were developed as part of the OECD/G20 Base Erosion and Profit Shifting (BEPS) project. Australia signed the multilateral instrument on June 7, 2017. For a bilateral tax treaty to be amended by the multilateral instrument, the two contracting parties must have its own: on 17 January 2020, HMRC announced that the treaty protocol between the United Kingdom and Ukraine, signed on 9 October 2017, had entered into force on 5 December 2019. The protocol introduces several changes, including a 5 per cent withholding tax on interest instead of the previous 10 per cent rate, a TPP and the mutual agreement procedure for arbitration. The provisions of the protocol apply from 1 January 2020 for withholding taxes, 6 April 2020 for UK income and capital gains tax and 1 April 2020 for UK corporate tax. We are preparing summary texts for most of the Australian tax treaties that have been amended by the MLI. The summary texts currently available in the table above are available here.

A synthesized text helps MLI users understand how the MLI changes the way the respective tax treaty works. The entry into force of the revised contracts with the Netherlands and Belgium (as amended by the MLI) is not retrodate, but applies to withholding tax, amounts paid or credited from 1 January 2020 for other income and capital gains taxes in the UK, from 6 April 2020 and uk corporation tax from 1 April 2020. The table below shows contracts whose activity is modified by the MLI. Contracts for which the effective date of the GI provisions is not yet known are those for which the contractor still intends to ratify, accept or approve the MMA and advises the OECD.