2019 Outlook: ‘End of Treaty Shopping’ for Multinationals

The world’s biggest companies will find it harder in 2019 to set up some business structures that let them achieve the lowest tax rates, after a novel new multilateral treaty goes into effect.

“Treaty shopping has come to an end,” said Pascal Saint-Amans, director of the Organization for Economic Cooperation and Development’s Center for Tax Policy and Administration.

Heading into 2019, 85 jurisdictions have signed and 17 have ratified the multilateral instrument (MLI), which enters into effect Jan. 1. That means it will begin modifying the bilateral tax treaties of 15 jurisdictions which have already ratified the measure, including Australia, ...