Principal Purposes Test: treaty benefits denied where obtaining the benefit was a principal purpose, subject to object and purpose exception. Article 30 implements a Limitation of Benefits rule preserving domestic anti avoidance law and denying treaty benefits where obtaining those benefits was a main purpose of a resident's creation, existence, or transactions, including entities lacking bona fide business activities. The MLI's Article 7 Principal Purposes Test supersedes incompatible treaty provisions: benefits are withheld if it is reasonable to conclude the benefit was one of the principal purposes of the arrangement, unless consistent with the treaty's object and purpose, and denial must be communicated between competent authorities.
Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
Provisions expressly mentioned in the judgment/order text.
Principal Purposes Test: treaty benefits denied where obtaining the benefit was a principal purpose, subject to object and purpose exception.
Article 30 implements a Limitation of Benefits rule preserving domestic anti avoidance law and denying treaty benefits where obtaining those benefits was a main purpose of a resident's creation, existence, or transactions, including entities lacking bona fide business activities. The MLI's Article 7 Principal Purposes Test supersedes incompatible treaty provisions: benefits are withheld if it is reasonable to conclude the benefit was one of the principal purposes of the arrangement, unless consistent with the treaty's object and purpose, and denial must be communicated between competent authorities.
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