Vietnam Signs Convention to Prevent Base Erosion and Profit Shifting
|Ambassador to France Dinh Toan Thang signed the convention on February 9 at the Organisation for Economic Co-operation and Development (OECD) headquarters in Paris. (Photo: VNA)|
Ambassador to France Dinh Toan Thang signed the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (MLI) at the Organisation for Economic Co-operation and Development (OECD) headquarters in Paris on February 9.
Ambassador Thang affirmed that expanding tax base, preventing collection source erosion and profit shifting is a focus in Vietnam’s tax reform strategy, according to VNA.
Last year, the Prime Minister issued a decision approving a project to review the effectiveness of the agreements for the avoidance of double taxation, impacts to Vietnam’s tax policy space and adjustment direction, in which the signing of relevant international commitments like the MLI is defined as a priority, he said.
The diplomat highlighted the significance of the MLI joining as Vietnam has become the co-chair of the OECD’s Southeast Asia Regional Programme for 2022-2025.
He expressed the belief that the implementation of the MLI will help further promote the partnership between Vietnam and the OECD and specify the memorandum of understanding on strengthening cooperation between the two sides that was signed by Prime Minister Pham Minh Chinh and OECD Secretary-General Mathias Cormann in Paris in last November in Paris.
|Ambassador to France Dinh Toan Thang signed the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting. (Photo: Baoquocte)|
OECD Deputy Secretary-General Yoshiki Takeuchi welcomed Vietnam, together with Thailand and Lesotho, to join the convention, raising the total signatories to 99. Yoshiki Takeuchi emphasized that efforts to combat tax base erosion and profit shifting would not be successful without collective action and the joint efforts of all parties.
Over the years, the OECD has been an important partner of Vietnam with the provision of policy consultations and support in various fields. So far, Vietnam has joined seven legal tools of the OECD.
In November 2016, over 100 jurisdictions concluded negotiations on the MLI. The MLI offers concrete solutions for governments to close the gaps in existing international tax rules by transposing results from the OECD/G20 BEPS Project into bilateral tax treaties worldwide, according to OECD.
The MLI modifies the application of thousands of bilateral tax treaties concluded to eliminate double taxation. It also implements agreed minimum standards to counter treaty abuse and to improve dispute resolution mechanisms while providing flexibility to accommodate specific tax treaty policies.
The MLI already covers 99 jurisdictions and entered into force on 1 July 2018. Signatories include jurisdictions from all continents and all levels of development and other jurisdictions are also actively working towards signature. The convention is still open for additional signatories.
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