Limitation on Benefits rule restricts treaty benefits to qualified persons, with active business and ownership/base erosion tests. Article 22 conditions entitlement to treaty benefits on being a qualified person or satisfying specified alternative tests: categories of individuals and entities, publicly traded company or primary place of management tests, five or fewer owners and base erosion limits, pension and ownership thresholds, and ownership/base erosion tests for other entities. It provides an active conduct of trade or business exception, company specific ownership and headquarters rules, detailed definitional tests (including qualifying intermediate owner, tested group and gross income), and a residual competent authority discretionary gateway based on substantial nontax nexus.
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.
Limitation on Benefits rule restricts treaty benefits to qualified persons, with active business and ownership/base erosion tests.
Article 22 conditions entitlement to treaty benefits on being a qualified person or satisfying specified alternative tests: categories of individuals and entities, publicly traded company or primary place of management tests, five or fewer owners and base erosion limits, pension and ownership thresholds, and ownership/base erosion tests for other entities. It provides an active conduct of trade or business exception, company specific ownership and headquarters rules, detailed definitional tests (including qualifying intermediate owner, tested group and gross income), and a residual competent authority discretionary gateway based on substantial nontax nexus.
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