Recent highlights have been dominated by new and amended treaties reflecting BEPS recommendations, including publication of the long awaited multilateral instrument (MLI).The UK has already been active in adopting into some of its treaties both the Action 6 minimum standard preamble that a treaty is not to be used for tax avoidance, and the principal purpose test. It has also adopted the Action 6 ‘savings’ clause, allowing it to tax residents despite treaty terms; Action 2, concerning fiscally transparent entities; and Action 7, concerning PE avoidance through anti-fragmentation. These changes reflect the UK government’s policy choices in relation to the MLI.
