11.02.2026Draft legislation to expand application of MLI introduced into formal legislative process
Draft law would add 62 additional double tax treaties to the list of “covered tax agreements” for MLI purposes
On 28 January and 2 February 2026, the German government introduced a draft law to amend the 2020 MLI Implementation Act into the formal legislative process by submitting the draft law to the upper and lower houses of parliament. The draft law was approved by the government on 19 December 2025, and includes an expansion of the list of “covered tax agreements” (CTAs) for purposes of the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (“MLI”) from 2016, which Germany implemented into domestic law in 2020.
The original implementation of the MLI into domestic law took place in two separate steps. First, through the MLI Implementation Act, the MLI was ratified under specific treaty law, which also included the relevant CTAs and Germany's selection decisions and reservations. Second, through the subsequent MLI Application Act in 2024, the modifications to the CTAs resulting from the MLI (taking into account the choices made by Germany and the respective other contracting states) were then specified. After the 2024 MLI Application Act was finalized, the completion of the domestic implementation procedure with regard to each CTA was notified to the OECD, and the modifications to each respective double tax treaty (DTT) finally became effective. The same steps now are required for the expansion of the list of CTAs for purposes of the MLI .
The 2020 MLI Implementation Act currently only includes 14 CTAs: Austria, Croatia, Czech Republic, France, Greece, Hungary, Italy, Japan, Luxembourg, Malta, Romania, Slovakia, Spain, and Turkey. So far, only nine of the 14 CTAs have been actually modified by the MLI (not yet modified are the CTAs with Austria, Italy, Luxembourg, Romania, and Turkey).
Among the 62 CTAs that would now be included in the MLI Implementation Act are DTTs with significant trading partners and members of the G20, such as the United States, Canada, China, Belgium, Poland, Portugal, South Korea, India, Indonesia, and Argentina.
The MLI selection decisions and reservations made by Germany for these 62 CTAs would be largely the same as those made for previously designated CTAs.
The modifications to the 62 CTAs would not be immediately applicable upon the finalization of the draft law. This would require the mutual designation of the respective CTA by both Germany and the other contracting state, an amendment to the 2024 MLI Application Act, and final notification to the OECD.
According to the legislative materials, it is Germany’s goal to expand the possibilities for updating all of its DTTs based on the MLI. It is, however, explicitly mentioned that the ability to hold bilateral treaty negotiations and adjustments of specific DTTs to the BEPS minimum standard should remain unaffected by this approach.
The draft law is now to be considered and discussed by the upper and lower houses of parliament.
Your contact
