The game is up for tax treaty shopping

International accord a ‘nail in the coffin’ for corporate tax avoidance schemes, says City lawyer

08 Jun 2017

Multinationals that exploit tax treaties must ‘recognise that the game is up’ after a new cross-border agreement designed to crack down on tax dodging was signed this week.

More than 70 countries have concluded negotiations on a multilateral instrument that will implement changes to thousands of tax treaties to halt abuse by companies and improve dispute resolution.

The agreement is intended to end a practice known as ‘treaty shopping’, whereby a corporation’s income is directed to countries with attractive tax treaties via ‘brass plate’ companies with little presence within the jurisdiction.

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