Prevention of treaty abuse: treaty benefits denied where obtaining them was a principal purpose, unless aligned with treaty objects. Article 28 provides that the Agreement does not restrict domestic exclusions, exemptions, deductions, credits or allowances; permits direct communication ... Summary
Prevention of treaty abuse: treaty benefits denied where obtaining them was a principal purpose, unless aligned with treaty objects.
Article 28 provides that the Agreement does not restrict domestic exclusions, exemptions, deductions, credits or allowances; permits direct communication between competent authorities to apply the Agreement; and requires mutual consent before referring disputes about tax measures under GATS Article XXII to the Council for Trade in Services. Paragraph 1 of Article 7 of the MLI (the Principal Purposes Test) applies and supersedes inconsistent provisions, denying treaty benefits where obtaining the benefit was one of the principal purposes of arrangements, unless granting the benefit accords with the Agreement's object and purpose.
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