Anti-abuse rule for permanent establishments restricts treaty benefits when low taxation in third jurisdictions; exceptions and competent authority relief apply. Diplomatic and consular fiscal privileges are preserved under international law and special agreements. The MLI modifies the Convention: its anti abuse rule for permanent establishments in third jurisdictions denies treaty benefits where income is treated as attributable to a third jurisdiction PE and taxed at substantially lower levels, subject to an active business exception and discretionary competent authority relief; the Principal Purposes Test denies benefits when obtaining a treaty advantage was a principal purpose unless consistent with the Convention's object and purpose.
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.
Anti-abuse rule for permanent establishments restricts treaty benefits when low taxation in third jurisdictions; exceptions and competent authority relief apply.
Diplomatic and consular fiscal privileges are preserved under international law and special agreements. The MLI modifies the Convention: its anti abuse rule for permanent establishments in third jurisdictions denies treaty benefits where income is treated as attributable to a third jurisdiction PE and taxed at substantially lower levels, subject to an active business exception and discretionary competent authority relief; the Principal Purposes Test denies benefits when obtaining a treaty advantage was a principal purpose unless consistent with the Convention's object and purpose.
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