Parliament Supports Next Step in Fight Against Aggressive International Tax Avoidance

From: Department of Finance Canada

News release

June 21, 2018 – Ottawa, Ontario – Department of Finance Canada

A fair and efficient tax system is an important part of the Government's commitment to help the middle class and to build an economy that works for everyone. By making sure that everyone pays their fair share, the Government can continue to safeguard its ability to invest in the programs and services that help the middle class and people working hard to join it.

The Government of Canada has taken the next step in the fight against aggressive international tax avoidance by introducing legislation in Parliament to 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. The Notice of Ways and Means Motion bringing this legislation into administrative effect has been adopted by Parliamentarians, and the legislation has passed first reading in the House of Commons.

A global initiative developed by over 100 jurisdictions, the MLI aims to counter 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.

Quotes

"I would like to thank and commend Parliamentarians for lending their support to this important new tool in our fight against aggressive international tax avoidance. By making sure that everyone pays their fair share, we are safeguarding our ability to invest in Canadians, while keeping taxes low for small businesses and middle class families."

- Bill Morneau, Minister of Finance

Quick facts

  • The Organisation for Economic Co-operation and Development (OECD) 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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Contacts

Media may contact:

Daniel Lauzon
Director of Communications
Office of the Minister of Finance
daniel.lauzon3@canada.ca
613-286-4285

Media Relations
Department of Finance Canada
fin.media-media.fin@canada.ca
613-369-4000

General Enquiries

Phone: 613-369-3710
Facsimile: 613-369-4065
TTY: 613-369-3230
E-mail: fin.financepublic-financepublique.fin@canada.ca

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