How Do ‘The Old’ and ‘The New’ Live Together? the Principal Purpose Test and Other Anti-avoidance Instruments in Tax Treaties

The entry into force of the Multilateral Instrument (MLI) will entail the massive incorporation of a general anti-avoidance rule (the principal purpose test) into a significant number of double taxation conventions. However, these conventions often contain other clauses of different origin that have traditionally been used to deal with the phenomenon of treaty abuse. This article describes the ‘problems of coexistence’ between the principal purpose test and these other clauses when their conditions of application and legal consequences may be different. Finally, it also offers legal solutions to these conflicts. Base erosion and profit shifting, multilateral instrument, anti-avoidance rules, general anti-avoidance rules, special anti-avoidance rules, principal purpose test, beneficial ownership, limitation on benefits.