How does the M LI address treaty abuse and treaty shopping?

The MLI contains six Articles to address treaty abuse. Two of these provisions reflect the Action 6 minimum standard on treaty abuse and the four other provisions are specific anti-abuse rules that target specific avoidance strategies.

The Principal Purposes Test that is introduced in all treaties covered by the MLI is an effective instrument to counter arrangements such as those described above that have been put in place for the principal purpose to obtain the benefits of a tax treaty.