Each September, the various double taxation agreements that Ireland has signed in the prior year are presented before this committee as part of the process of ratification. This year we are seeking to ratify a particularly important international agreement that seeks to modify the application of existing double tax agreements to ensure that they are robust and in line with evolving Organisation for Economic Co-operation and Development, OECD, base erosion and profit-shifting, BEPS, best practice. In this regard, I am pleased to bring before the committee on behalf of the Minister of Finance, Deputy Donohoe, a draft Government order as part of the ratification process for the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting. In addition, I am presenting to the committee a draft order to implement a new double taxation relief agreement with the Republic of Ghana.
Earlier this month, the Minister published Ireland's corporation tax roadmap, which takes stock of the changing international tax environment, outlines the actions we have taken to date and the additional actions that will be taken in the coming months and years. Among those actions is our commitment to implement the OECD's BEPS recommendations and the other international agreements into which we have entered. The BEPS multilateral convention seeks to implement all of the BEPS recommendations that relate to bilateral double tax agreements. Ireland has 74 double taxation agreements in place at present. With the exception of this agreement with Ghana, they are currently in effect. Our double taxation agreement network is an important aspect of our competitiveness in attracting investment and facilitating Irish business in operating internationally. In addition, double tax agreements are a cornerstone of Ireland's trade policy and are a key element in stimulating trade and investment flows between countries. The benefits of double taxation agreements are well known. They facilitate trade and investment, provide greater predictability and fairness for taxpayers regarding their tax obligations in foreign jurisdictions and they are key to the prevention of double taxation.
As part of the OECD's BEPS process, concerns were identified as to how double taxation agreements could potentially facilitate double non-taxation. The BEPS recommendations that were published in October 2015 include a number of recommendations for amendments. The double tax agreements ensure that they cannot be used for aggressive tax planning arrangements. There are approximately 3,000 double tax agreements in existence worldwide. It was acknowledged as part of the BEPS initiative that it would be impractical to update all of those double tax agreements through bilateral negotiations. It was agreed that a multilateral convention would provide the most appropriate and timely methods for countries to update their existing double tax agreements. In November 2016, over 100 jurisdictions concluded negotiations on the BEPS multilateral convention. Ireland was among the first signatures of this important international agreement in a ceremony in Paris in June 2017. Upon coming into force, it is expected that the majority of Ireland's double tax agreements will be modified by the BEPS multilateral convention, with the exception of those countries with which we have agreed to update our agreement bilaterally. Our existing double tax agreements with the Netherlands, Switzerland and Germany will be updated bilaterally, and some other jurisdictions with which we have double taxation agreements may request a similar approach because of restrictions in their own domestic law. As for those partner countries that have not yet signed the BEPS multilateral convention, Ireland has written to them to discuss options for implementing the BEPS recommendations. We are committed to ensuring all of our treaties meet the minimum standards agreed in the BEPS process.
In adopting the BEPS multilateral convention countries have choices as to which BEPS measures to adopt. As an active contributor to the BEPS initiative, it is proposed that Ireland will adopt the majority of the choices contained in the multilateral convention. While some of the articles are minimum standards and thus compulsory for all signatories, Ireland has also chosen to adopt a number of additional optional best practice measures. The approach that Ireland is taking to the various options is the same as the provisional approach published when the convention was signed last year. The key provision in the convention is for countries to include a general anti-avoidance clause in their tax treaties. Ireland proposes to select a principal purposes test, which requires activity to be in a country for legitimate purposes in order to access the benefits of the country's tax treaties. It is expected that all countries signing up to the BEPS multilateral convention will select this provision.
Ireland is also opting to allow for double taxation agreement disputes to be subject to binding arbitration where tax authorities cannot reach agreement. This will be welcomed by businesses as it should minimise the cases where double taxation arises. Most of the options in the convention which Ireland is not proposing to adopt are primarily technical in nature and not relevant to Ireland's tax systems.
I would draw the committee's attention, in particular, to the position in respect of permanent establishment rules which were dealt with by Articles 12 to 15, inclusive, of the multilateral convention. The permanent establishment test determines how much activity a company must have in a country before it must pay corporation tax. Ireland will opt in to the new anti-avoidance rules in Articles 13 to 15, inclusive, to stop businesses engaging in artificial behaviour to avoid having a taxable presence in a country.
However, Ireland will reserve its position in respect of Article 12 of the multilateral convention. Article 12 operates a new test for permanent establishment when a company is operating in a country through an agent. We believe there is not yet sufficient certainty as to how the new rules in Article 12 would be interpreted and applied and our caution is shared by a majority of countries which have signed the multilateral convention. This caution is reflected by the fact that it is expected that only 17% of the double tax agreements that are amended by the multilateral convention will include Article 12. We are committed to keeping the position under review, however, as it would be possible for Ireland to opt in to this article at a later date post ratification subject to governmental approval and Dáil Éireann approval should sufficient clarity be reached to its operation. It would also be possible to include this article in double taxation agreements bilaterally should a treaty partner seek to include it in future negotiations and make a strong case in negotiations.
Today, the committee's approval is also sought for an order as part of the ratification of a double taxation agreement with Ghana. In 2012, officials from the Ministry of Foreign Affairs of the Republic of Ghana raised with the Department of Foreign Affairs and Trade the possibility of negotiating a double tax agreement with Ireland. Negotiations on the double taxation agreement with the Republic of Ghana, which started in 2014, were successfully concluded in 2016.
Ireland's bilateral trade with Ghana continues to grow. For example, in 2016, Ireland's merchandised trade with Ghana was worth €43.4 million. Ghana is the sixth largest market in Africa for Irish food and drink exports. A number of companies, such as Guinness, Tullow Oil and ESB International operate there. The double tax agreement will help to deepen our economic links with Ghana, which is forecast to be among the world's fastest growing economies in 2018.
The double taxation agreement with Ghana is comprehensive in scope and generally follows the OECD and UN model conventions. It is worth noting that this double taxation agreement contains a number of provisions from the UN model convention that benefit Ghana as a developing country. For example, Ireland agreed to the inclusion of the imposition of withholding tax on technical fees as a UN model provision at the request of Ghana even though it is not normally part of our double taxation agreement policy. In addition, to encourage the development of education in Ghana, there is a two-year tax exemption for teachers, professors and researchers who work in universities, research institutes or other higher education establishments in Ghana.
If Dáil Éireann approves the taking of these orders, the Minister for Finance will include the orders in the Taxes Consolidation Act 1997 by way of an amendment in the upcoming finance Bill. This will enable Ireland to complete the necessary notifications to finalise the ratifications on both agreements.
I commend these draft orders to the committee. If required, I will be happy to answer whatever questions members may have.