Principal Purposes Test denies treaty benefits when obtaining them was a principal purpose unless consistent with treaty objects. The provision allows denial of treaty benefits where the main purpose of a resident's creation or a transaction was to obtain treaty benefits. Article 7 of the MLI-the Principal Purposes Test-supersedes incompatible treaty text and provides that a benefit shall not be granted if it is reasonable to conclude obtaining the benefit was one of the principal purposes of the arrangement or transaction, unless granting the benefit aligns with the object and purpose of the relevant treaty provision.
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 denies treaty benefits when obtaining them was a principal purpose unless consistent with treaty objects.
The provision allows denial of treaty benefits where the main purpose of a resident's creation or a transaction was to obtain treaty benefits. Article 7 of the MLI-the Principal Purposes Test-supersedes incompatible treaty text and provides that a benefit shall not be granted if it is reasonable to conclude obtaining the benefit was one of the principal purposes of the arrangement or transaction, unless granting the benefit aligns with the object and purpose of the relevant treaty provision.
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