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The signing of the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (MLI), has enabled the participant jurisdictions to begin the process of implementing certain treaty-based Base Erosion and Profit Shifting (BEPS) recommendations into their network of double tax conventions. In line with Action 6 of the BEPS Plan, as per Article 7 of the MLI, a minimum anti-abuse standard provision to counter treaty shopping was introduced. This article discusses the outcomes deriving from the application of the Principal Purpose Test (PPT), as default provision, and its possible interplay with the treaty anti-avoidance tool presented by the clause of the beneficial owner for tax treaty purposes. The analysis is supported by practical guidelines issued to holding companies, based on recent case law. [ABSTRACT FROM AUTHOR]

It is estimated that the Principal Purpose Test (PPT) contained in the Multilateral Instrument (MLI) will be incorporated in almost one thousand one hundred tax treaties. There is no doubt that this test will have wide ramifications for structuring activities that are carried out with tax treaties. In this contribution the author undertakes a detailed analysis of the test. Firstly, the author discusses the background to the PPT. Secondly, the author analyses various elements of the test and provides guidance on interpreting its subjective and objective elements. Thirdly, the author critically comments and expresses his opinion on all the nineteen examples that have been provided in the commentary in relation to the test. In this regard, it is pertinent to note that several of these examples seem to be inspired from Court judgments on the 'beneficial ownership' clause and the Exchange of Letters with respect to the anti-conduit rule contained in the US-UK tax treaty. Fourthly, the author analyses the legal consequences of denying treaty benefits in relation to rule and treaty shopping schemes by focussing on the discretionary relief clause. Finally, the author concludes and provides certain recommendations to intermediary entities such as holding, financing and intellectual property (IP) entities. It is pertinent to note that the author will analyse the relationship between the PPT (as well as the guiding principle) and other anti-avoidance rules, treaty and domestic, in a subsequent contribution. [ABSTRACT FROM AUTHOR]

This article discusses the implementation, operation and application of Article 7(1) of the 'Multilateral Convention', which contains provisions related to the prevention of treaty abuse, including treaty shopping, that correspond to changes proposed in the Base Erosion and Profit Shifting (BEPS) Action 6 Final Report. The wording of the comparable Covered Tax Agreements between the United Kingdom and China, India, Russia and South Africa, vis-à-vis the wording of Article 7(1) of the Multilateral Instrument (MLI), is analysed, where 'purpose provisions' are included with respect to specific benefits, generally royalties, interests and dividends, although there is no 'catch-all provision'. The provisions in these Double Taxation Agreements might be replaced by the 'Principal Purpose Test' provision of Article 7(1). Nonetheless, mismatched choices and unpredictable asymmetries in practice will arise, resulting in further inconsistencies and complexities that may cause uncertainty about which tax treaty wording is of value. To overcome these issues, the compatibility clause in Article 7(2) of the MLI will come into play, supplemented by the lex posterior principle of the Vienna Convention on the Law of Treaties (VCLT). [ABSTRACT FROM AUTHOR]

The article argues that the multilateral instrument (MLI) was primarily devised to preserve the conservative evolution of the international tax regime, based on bilateral tax treaties, reciprocity and competition, and not as a multilateral tax treaty based on which a new coordinative regime shall arise. The article makes the point, however, that despite this main purpose the mere conclusion of the MLI introduces ambivalence into the international tax regime, breaking with its orthodoxy in a meaningful, even if not yet significant manner. The article makes fifteen observations on the MLI in its current status to substantiate this argument. [ABSTRACT FROM AUTHOR]

This work puts forward an interdisciplinary approach to the study of International Taxation Dispute Resolution Process (ITDRP) which combines legal analysis with International Relations theory. It is argued that the strengths of this approach are twofold: it underlies a number of aspects embedded in ITDRPs which are not immediately evident according to a pure legal analysis and develops a framework for the comparison between ITDRPs and the main systems of international dispute settlement in other domains allowing to overcome a number of shortcomings which a comparison conducted on pure legal terms entails. [ABSTRACT FROM AUTHOR]

Despite continuous instability in the European Union, Scandinavian countries exhibit continuously economic growth and stability. Three (Denmark, Norway and Sweden) are not in the Eurozone and one (Norway) is only a European Economic Area Member State. In the article 'Transfer Pricing Planning with Accuracy and Control' (see intertax, issue October 2013, pp.542-550) the author had outlined the importance of transfer pricing planning in international tax planning. As the advantages and strategies of international tax planning with regard to antiavoidance legislation in Scandinavian countries had not been investigated so far, this is now done in detail - with reference to the corporate 2014 income tax burden of the thirty-four OECD Member States. [ABSTRACT FROM AUTHOR]

Free Zones in the United Arab Emirates (UAE) offer an abundance of tax and economic advantages for companies wishing to incorporate in the UAE and develop their business with a high degree of flexibility. However, the application of Double Taxation Agreements (DTAs) makes it increasingly difficult to their access benefits, namely the reduction of withholding tax on dividends or interests, as Contracting States tend to require at least Tax Residency Certificates (TRCs). This increasingly pressing requirement leads to a double issue: the choice of the Free Zone in which it is conceivable to obtain a TRC and the general anti-abuse clause which could still allow the Contracting State to deny the right of benefiting from the provisions of a DTA even when a TRC has been issued. This article utilizes the example of the DTA between the UAE and Switzerland to illustrate and analyse this problem. [ABSTRACT FROM AUTHOR]