Mexico has signed the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (“Multilateral Instrument” or “MLI”) on 7th June 2017. The signing of the MLI will modify over 1,100 international treaties by more than 68 countries aimed to avoid double taxation and tax evasion, including those treaties previously signed by Mexico. The Convention is a key outcome of the OECD/G20 Base Erosion and Profit Shifting (BEPS) project, which aims to 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. The OECD’s goal is to lessen tax avoidance by Multinational Groups emerged from forceful International Tax and Transfer Pricing positions, which, as per OECD estimations, ranges from 100 to 240 billion dollars every year.
The signing of the MLI effectively concludes the objective put forward by Action 15 of the BEPS Plan, and is without a doubt a watershed moment relating to International Tax. It is accordingly fundamental for Multinational Groups to assess the adequacy of their Transfer Pricing and International Tax policies to the new worldwide condition.