diff --git a/news/470.bugfix b/news/470.bugfix
new file mode 100644
index 000000000..0bda78b3d
--- /dev/null
+++ b/news/470.bugfix
@@ -0,0 +1 @@
+Fix support for merge tags in YAML files
diff --git a/omegaconf/_utils.py b/omegaconf/_utils.py
index 1dcf7d9f6..1b9f461b6 100644
--- a/omegaconf/_utils.py
+++ b/omegaconf/_utils.py
@@ -81,27 +81,21 @@ def yaml_is_bool(b: str) -> bool:
 
 
 def get_yaml_loader() -> Any:
-    # Custom constructor that checks for duplicate keys
-    # (from https://gist.github.com/pypt/94d747fe5180851196eb)
-    def no_duplicates_constructor(
-        loader: yaml.Loader, node: yaml.Node, deep: bool = False
-    ) -> Any:
-        mapping: Dict[str, Any] = {}
-        for key_node, value_node in node.value:
-            key = loader.construct_object(key_node, deep=deep)
-            value = loader.construct_object(value_node, deep=deep)
-            if key in mapping:
-                raise yaml.constructor.ConstructorError(
-                    "while constructing a mapping",
-                    node.start_mark,
-                    f"found duplicate key {key}",
-                    key_node.start_mark,
-                )
-            mapping[key] = value
-        return loader.construct_mapping(node, deep)
-
     class OmegaConfLoader(yaml.SafeLoader):  # type: ignore
-        pass
+        def construct_mapping(self, node: yaml.Node, deep: bool = False) -> Any:
+            keys = set()
+            for key_node, value_node in node.value:
+                if key_node.tag != yaml.resolver.BaseResolver.DEFAULT_SCALAR_TAG:
+                    continue
+                if key_node.value in keys:
+                    raise yaml.constructor.ConstructorError(
+                        "while constructing a mapping",
+                        node.start_mark,
+                        f"found duplicate key {key_node.value}",
+                        key_node.start_mark,
+                    )
+                keys.add(key_node.value)
+            return super().construct_mapping(node, deep=deep)
 
     loader = OmegaConfLoader
     loader.add_implicit_resolver(
@@ -126,9 +120,6 @@ class OmegaConfLoader(yaml.SafeLoader):  # type: ignore
         ]
         for key, resolvers in loader.yaml_implicit_resolvers.items()
     }
-    loader.add_constructor(
-        yaml.resolver.BaseResolver.DEFAULT_MAPPING_TAG, no_duplicates_constructor
-    )
     return loader
 
 
diff --git a/tests/test_create.py b/tests/test_create.py
index 5faa45442..2a0b28432 100644
--- a/tests/test_create.py
+++ b/tests/test_create.py
@@ -1,6 +1,7 @@
 """Testing for OmegaConf"""
 import re
 import sys
+from textwrap import dedent
 from typing import Any, Dict, List, Optional
 
 import pytest
@@ -292,3 +293,48 @@ def test_create_untyped_dict() -> None:
 
     cfg = DictConfig(ref_type=Dict, content={})
     assert get_ref_type(cfg) == Optional[Dict]
+
+
+@pytest.mark.parametrize(
+    "input_",
+    [
+        dedent(
+            """\
+                a:
+                  b: 1
+                  c: 2
+                  b: 3
+                """
+        ),
+        dedent(
+            """\
+                a:
+                  b: 1
+                a:
+                  b: 2
+                """
+        ),
+    ],
+)
+def test_yaml_duplicate_keys(input_: str) -> None:
+    with pytest.raises(yaml.constructor.ConstructorError):
+        OmegaConf.create(input_)
+
+
+def test_yaml_merge() -> None:
+    cfg = OmegaConf.create(
+        dedent(
+            """\
+                a: &A
+                    x: 1
+                b: &B
+                    y: 2
+                c:
+                    <<: *A
+                    <<: *B
+                    x: 3
+                    z: 1
+                """
+        )
+    )
+    assert cfg == {"a": {"x": 1}, "b": {"y": 2}, "c": {"x": 3, "y": 2, "z": 1}}
diff --git a/tests/test_serialization.py b/tests/test_serialization.py
index 74db61fd7..2299b124f 100644
--- a/tests/test_serialization.py
+++ b/tests/test_serialization.py
@@ -5,7 +5,6 @@
 import pickle
 import tempfile
 from pathlib import Path
-from textwrap import dedent
 from typing import Any, Dict, List, Optional, Type
 
 import pytest
@@ -142,46 +141,6 @@ def test_pickle(obj: Any) -> None:
             assert c1._metadata.key_type is Any
 
 
-def test_load_duplicate_keys_top() -> None:
-    from yaml.constructor import ConstructorError
-
-    try:
-        with tempfile.NamedTemporaryFile(delete=False) as fp:
-            content = dedent(
-                """\
-                a:
-                  b: 1
-                a:
-                  b: 2
-                """
-            )
-            fp.write(content.encode("utf-8"))
-        with pytest.raises(ConstructorError):
-            OmegaConf.load(fp.name)
-    finally:
-        os.unlink(fp.name)
-
-
-def test_load_duplicate_keys_sub() -> None:
-    from yaml.constructor import ConstructorError
-
-    try:
-        with tempfile.NamedTemporaryFile(delete=False) as fp:
-            content = dedent(
-                """\
-                a:
-                  b: 1
-                  c: 2
-                  b: 3
-                """
-            )
-            fp.write(content.encode("utf-8"))
-        with pytest.raises(ConstructorError):
-            OmegaConf.load(fp.name)
-    finally:
-        os.unlink(fp.name)
-
-
 def test_load_empty_file(tmpdir: str) -> None:
     empty = Path(tmpdir) / "test.yaml"
     empty.touch()