Next Steps to Fight Aggressive International Tax Avoidance Become Law

From: Department of Finance Canada

News release

June 21, 2019 – Ottawa, Ontario – Department of Finance Canada

By ensuring all Canadians pay their fair share of taxes, the Government of Canada is safeguarding its ability to invest in the economy — supporting the middle class and those working hard to join it.

That means taking the next steps in the fight against aggressive international tax avoidance.

Today, Finance Minister Bill Morneau welcomed the Royal Assent of Bill C-82, An Act to implement a multilateral convention to implement tax treaty related measures to prevent base erosion and profit shifting .

The Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (also known as the Multilateral Instrument or MLI) is a global initiative developed by over 100  jurisdictions to counter tax avoidance strategies that lead to base erosion and profit shifting (BEPS). BEPS refers to international tax planning used by some corporations and wealthy individuals to inappropriately shift profits to low-tax or no-tax locations, to avoid paying their fair share of taxes.

The MLI will allow Canada to modify its existing tax treaties to include measures developed under the Organisation for Economic Co-operation and Development /G20 BEPS project without having to individually renegotiate those treaties, allowing the measures to be implemented in a synchronized and efficient manner. The MLI measures will enhance Canada's ability to address treaty abuse and improve the dispute resolution process under tax treaties. 

Quotes

"Our government is committed to building an economy that helps people and businesses get ahead. To do that, we need a tax system that is effective and fair. The MLI will help us build on actions we've 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 working in their best interest."

- Bill Morneau, Minister of Finance

Quick facts

  • The Government is also taking a comprehensive and coordinated approach to combatting money laundering, terrorist financing and organized crime through Canada's Anti-Money Laundering and Anti-Terrorist Financing (AML/ATF) Regime, including: 

  • Creating the Anti-Money Laundering Action, Coordination and Enforcement Team, which will bring together dedicated experts from across intelligence and law enforcement agencies to identify and address significant money laundering and financial crime threats.

  • Creating a multi-disciplinary Trade Fraud and Trade-Based Money Laundering Centre of Expertise to strengthen capacity at the Canada Border Services Agency and the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) to target these growing threats.

  • Strengthening operational capacity at FINTRAC, Canada's AML/ATF regulator and financial intelligence unit.

  • 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.

  • Canada signed the MLI on June 7, 2017 as part of its commitment to meet the BEPS minimum standards on treaty abuse and improving the dispute resolution process under tax treaties.

  • Canada has also indicated an intention to adopt additional measures under the MLI, including mandatory binding arbitration in relation to tax treaty disputes.

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Contacts

Media may contact:

Pierre-Olivier Herbert
Director of Media Relations
Office of the Minister of Finance
pierre-olivier.herbert@canada.ca
613-369-5696

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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