S.L. 123.183 Art. 2Arrangements to have effect. 2 [S.L. 3

It is hereby declared:

(a) that it is expedient that the arrangements specified in the Multilateral Convention (Implementing Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting) set out in the Schedule to this Order (hereinafter referred to as "the Convention") made with a view to have an effective mechanism for the implementation of agreed changes in a synchronised and efficient manner across the network of existing agreements for the avoidance of double taxation on income without the need to bilaterally renegotiate each such agreement should have effect in Malta;

(b) that the Convention set out in Schedule 1 to this Order was signed on the 7th of June 2017;

(c) that the list of Malta’s reservations and notifications is set out in Schedule 2 to this Order;

(d) that the Convention shall enter into force in accordance with Article 34 of the Multilateral Convention as set out in the Schedule to this Order;

(e) that the date of entry into force of the Convention in Malta shall be announced by notice in the Gazette. 123.183 EROSION AND PROFIT SHIFTING) SCHEDULE 1

(Article 2)

Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting

The Parties to this Convention,

Recognising that governments lose substantial corporate tax revenue because of aggressive international tax planning that has the effect of artificially shifting profits to locations where they are subject to non-taxation or reduced taxation;

Mindful that base erosion and profit shifting (hereinafter referred to as "BEPS") is a pressing issue not only for industrialised countries but also for emerging economies and developing countries;

Recognising the importance of ensuring that profits are taxed where substantive economic activities generating the profits are carried out and where value is created;

Welcoming the package of measures developed under the OECD/G20 BEPS project (hereinafter referred to as the "OECD/G20 BEPS package");

Noting that the OECD/G20 BEPS package included tax treaty-related measures to address certain hybrid mismatch arrangements, prevent treaty abuse, address artificial avoidance of permanent establishment status, and improve dispute resolution;

Conscious of the need to ensure swift, co-ordinated and consistent implementation of the treaty related BEPS measures in a multilateral context;

Noting the need to ensure that existing agreements for the avoidance of double taxation on income are interpreted to eliminate double taxation with respect to the taxes covered by those agreements without creating opportunities for non-taxation or reduced taxation through tax evasion or avoidance (including through treaty-shopping arrangements aimed at obtaining reliefs provided in those agreements for the indirect benefit of residents of third jurisdictions);

Recognising the need for an effective mechanism to implement agreed changes in a synchronised and efficient manner across the network of existing agreements for the avoidance of double taxation on income without the need to bilaterally renegotiate each such agreement;

Have agreed as follows: