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Cabinet nod for signing of convention on BEPS

Press Trust of India  |  New Delhi 

The Cabinet today gave its go ahead for signing of a multilateral convention to implement treaty to check evasion by preventing Base Erosion and Profit Shifting (BEPS).

Briefing reporters after the Cabinet meeting, Power Minister Piyush Goyal said the convention is an outcome of the OECD/G20 BEPS Project to tackle BEPS through planning strategies that exploit gaps and mismatches in rules to artificially shift profits to low or no-locations, resulting in little or no overall corporate being paid.


The final BEPS project identified 15 actions to address BEPS in a comprehensive manner.

Implementation of the final BEPS Package requires changes to more than 3,000 bilateral treaties which will be burdensome and time consuming.

In view of the same, the convention was conceived as a multilateral instrument which would swiftly modify all covered bilateral treaties (Covered Agreements/CTA) to implement BEPS measures.

For this purpose, formation of an Ad-hoc Group for the development of such multilateral instrument was endorsed by the G20 Finance Ministers and Central Bank Governors in February 2015.

India was part of the Ad Hoc Group of more than 100 countries and jurisdictions from G20, OECD, BEPS associates and other interested countries, which worked on an equal footing on the finalisation of the text of the Multilateral Convention, starting May 2015.

The convention has been opened for signature as on December 31, 2016 and a first joint signing ceremony is scheduled to be held in Paris on June 7.

Signature is the first step in the process of expressing consent to be bound by the convention, which will become binding only upon ratification, an official release said.

"A list of Covered Agreements as well as a list of reservations and options chosen by a country are required to be made at the time of signature or when depositing the instrument of ratification," it said.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

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