The Croatian government on Thursday sent to the parliament a final bill ratifying the Multilateral Convention to Implement Tax Treaty Related to Measures to Prevent Base Erosion and Profit Shifting.

The multilateral convention was signed in 2017 in Paris, and it needs to be ratified in order to enter into force, Deputy Prime Minister and Finance Minister Zdravko Maric said.

According to him, the multilateral convention will quickly and efficiently modify international tax rules contained in bilateral agreements on the avoidance of double taxation and reduce the possibility of multinational enterprises avoiding paying taxes.

The multilateral convention covers 65 treaties for the avoidance of double taxation that Croatia has concluded with other states and that are in force, and they will be modified provided that those states also list the treaties.

That way, Maric said, it will be possible to introduce the minimum standards for the effective prevention of the abuse of treaties on the avoidance of double taxation and for more effective mutual agreement procedures.

In addition, numerous expensive bilateral negotiations to amend an agreement on the avoidance of double taxation will be avoided.

At the same time, it will be ensured that the results of the Base Erosion and Profit Shifting (BEPS) action plan are consistently implemented, which should strengthen legal certainty and predictability for companies all over the world and improve the functioning of the international legal system for the benefit of all citizens, Maric said.