OECD gets cracking on Multilateral Instrument - BEPS consensus a step closer?
24 months back, when OECD embarked on the ambitious & grandiose BEPS project, skeptics were a plenty. While the OECD has answered many of its critics with a robust pace of work that seems on track to meet the September 2015 deadline for several Action Plans, a billion dollar question still keeps popping up - How will 100 odd countries implement BEPS in the wake of their double tax treaty obligations?
From Day 1, OECD has cited the Multilateral Instrument as the tool to get developed and developing countries with diverse interest, but with a common objective of putting an end to international tax avoidance, to sit across the table and hammer out a consensus, that would in one stoke, amend 3000 bilateral tax treaties. Towards this end, the first meeting of the ad-hoc group for development of Multilateral Instrument, was held on May 27, 2015 wherein procedural issues were agreed upon so that the substantive work can begin when the countries re-convene in November.
Does this signal the countdown to the inevitability of BEPS becoming a legislative reality by the time we say good-bye to 2015? Could there still be that slight distance between the cup & the lip that may spoil the BEPS party? What are the key roadblocks/conflicting interests that could be an hurdle to the signing of a potentially historic Multilateral Instrument signing convention?