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Clifford Chance

Clifford Chance

Briefings

The BEPS multilateral convention: who loves SLOBs?

10 July 2017

The BEPS multilateral convention was signed by 68 countries on 7 June 2017. It will ultimately modify over 1,100 double tax treaties. In this article, we examine the two options for countering ‘treaty abuse’ (following BEPS Action 6) presented by the convention: a principal purpose test, very similar to the anti-avoidance rule included in UK treaties for years; and a US-style limitation on benefits article that had the potential to hinder much cross-border investment. We also observe that the principal purpose test is the default position under the convention and very few states have opted for the limitation on benefits article, which means it is of limited relevance in practice.

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The BEPS multilateral convention: who loves SLOBs?

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