Canada Takes Next Step in Fight Against Aggressive International Tax Avoidance
May 28, 2018 – Ottawa, Ontario – Department of Finance Canada
To ensure that all Canadians pay their fair share of taxes, and to safeguard the Government's ability to invest in the programs and services that help the middle class and people working hard to join it, the Government of Canada is taking the next step in the fight against aggressive international tax avoidance.
Today, Finance Minister Bill Morneau tabled a Notice of Ways and Means Motion in the House of Commons formalizing the Government's intention to introduce legislation that would enact the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting—also known as the Multilateral Instrument or MLI—into Canadian law. A global initiative developed by over 100 jurisdictions, the MLI is aimed at countering tax avoidance strategies that lead to base erosion and profit shifting (BEPS), in which businesses and wealthy individuals use tax treaty loopholes to inappropriately shift profits to low-tax or no-tax locations, to avoid paying taxes.
The MLI will build on actions that the Government has already taken to enhance the integrity of Canada's tax system—both at home and abroad—and give Canadians greater confidence that the system is fair for everyone. These actions include more funding for the Canada Revenue Agency to support its efforts to crack down on tax evasion and combat tax avoidance. These investments have helped to identify billions of dollars that can be recovered and invested in the programs and services that Canadians rely on.
"The MLI is an important tool in combatting aggressive international tax avoidance. By making sure that everyone pays their fair share, we can safeguard our ability to invest in the programs and services that help the middle class and people working hard to join it."
- Bill Morneau, Minister of Finance
The Organisation for Economic Co-operation and Development's (OECD's) Inclusive Framework on BEPS brings together over 100 countries and jurisdictions to collaborate on the implementation of the OECD/G20 BEPS package.
The MLI is intended to allow participating jurisdictions to modify their existing tax treaties to include measures developed under the OECD/G20 BEPS project without having to individually renegotiate those treaties.
Canada signed the MLI on June 7, 2017, and expressed its intention to adopt the BEPS minimum standards on treaty abuse and improving dispute resolution, as well as mandatory binding arbitration in relation to tax treaty disputes.
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Office of the Minister of Finance
Department of Finance Canada
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