14 May 2019 IFA Conference – Stephanie Smith on MLI – MLI Progress

Approximately 20 of Canada’s treaties will be updated to include arbitration. Of those 20, 13 have agreed to Canada’s preference for last best offer (i.e. “baseball-style” arbitration) and seven have indicated their preference for independent opinion. For those seven, which include Sweden and Japan, further negotiation is needed. The 13 baseball-style partners include Australia, France, Italy and Spain.

When the Notice of Ways and Means motion for the implementation of MLI was tabled, Canada indicated that it would adopt additional provisions of the MLI including the tie-breaker rule for dual-resident entities. About 23 of Canada’s tax treaties are expected to be updated with that rule as a result of the MLI. Many of Canada’s tax treaties already have that rule, so this will result in the provision covering almost all of Canada’s treaty network.