The MLI is estimated to be effective for most calendar-year Canadian taxpayers starting January 1, 2020

At the time of the signing of the Multilateral Instrument in June 2017, Canada listed 75 treaties as covered tax agreements. Since then, some additional countries that have either joined the ad hoc group or signed the multilateral instrument with a view to a treaty with Canada. There will be significant consideration to including those treaties where there would be a match prior to ratification.

Canada agreed only to the BEPS minimum standards plus mandatory arbitration. This was done largely for timing reasons (plus the irreversibility of a decision to agree to a higher level of standards), and Finance is actively considering whether to adopt additional provisions. Furthermore, the fact that a particular measure was not adopted in June does not indicate that Canada does not agree with the related policy, and Canada may pursue that policy in bilateral negotiations.

There are uncertainties as to when the MLI will come into effect insofar as Canada is concerned. With respect to withholding taxes, entry into force on January 1, 2019 is possible, although January 1, 2020 also is a possibility. With respect to other taxes and in relation to taxpayers with calendar taxable periods, entry into force effective January 1 of their 2020 calendar is quite likely (assuming a “match” with the other relevant country).

20 November 2017 CTF Annual Conference - Department of Finance on BEPS