MULTILATERAL CONVENTION TO BE VALID IN SLOVAKIA FROM 1 JANUARY 2019

On 21 September 2018, the Slovak Republic became the twelfth country to officially deposit its Ratification Document for the “Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting” with the depositary of the Convention, the Secretary General of the OECD.

The Multilateral Convention enables selected measures to combat tax base erosion and profit shifting (BEPS) to be effectively and rapidly implemented into individual double taxation treaties (over two thousand treaties) without the need to change them individually. The primary objective of these measures is to prevent artificial shifting of profits by multinational groups in order to reduce their tax bases.

The convention will only affect double taxation treaties concluded between countries that have already ratified the Multilateral Convention. The Slovak Republic chose to amend its 63 valid and effective double taxation treaties by means of the Multilateral Convention.

The Slovak Republic signed the convention with 67 other countries in June 2017. To date, the Multilateral Convention has been signed by 84 countries. The Multilateral Convention enters into force for the Slovak Republic from 1 January 2019.

Get in contact with your tax advisor should you have some specific tax structures in place in your group to find out the potential impact for you.