The Finance Minister, Bill Morneau, tabled a Notice of Ways and Means Motion in the House of Commons on May 28, 2018, for 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. It is 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 Finance Minister said that the MLI is an important tool in combatting aggressive international tax avoidance. The MLI will come into force for a specific covered agreement on the first day of the month following a three-month period after both parties to the covered agreement have deposited their ratification instrument.
