Treaty abuse prevention: adopt PPT and LOB measures to stop treaty shopping and double non taxation opportunities. Action 6 mandates an express treaty statement that treaties aim to eliminate double taxation without creating non taxation opportunities and requires jurisdictions to implement anti abuse measures by adopting either a Principal Purpose Test with a simplified or detailed Limitation on Benefits rule, the PPT alone, or a detailed LOB combined with measures addressing conduit arrangements. The report also prescribes treaty rules to counter dividend stripping, circumvention of source taxation on property rich companies, dual residency cases and transfers to permanent establishments in low tax jurisdictions, and stresses the complementary role of domestic anti abuse rules.
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.
Treaty abuse prevention: adopt PPT and LOB measures to stop treaty shopping and double non taxation opportunities.
Action 6 mandates an express treaty statement that treaties aim to eliminate double taxation without creating non taxation opportunities and requires jurisdictions to implement anti abuse measures by adopting either a Principal Purpose Test with a simplified or detailed Limitation on Benefits rule, the PPT alone, or a detailed LOB combined with measures addressing conduit arrangements. The report also prescribes treaty rules to counter dividend stripping, circumvention of source taxation on property rich companies, dual residency cases and transfers to permanent establishments in low tax jurisdictions, and stresses the complementary role of domestic anti abuse rules.
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