Irrelevant or Even Worse? The Vicious Dilemma of the New Tax Treaty Preamble

Andres Baez Moreno ()
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Andres Baez Moreno: Max Planck Institute for Tax Law and Public Finance, Munich

Canadian Tax Journal, 2025, vol. 73, issue 1, 1-39

Abstract: The central thesis of this article is that the significance of the new preamble of the OECD model tax convention and the tax arrangements governed by the multilateral instrument should be evaluated with caution in the two areas where their proponents intend to see effects: (1) The preamble should not have effects on its own, since this could significantly undermine the integrity of the rule interpretation process. (2) The preamble should not serve as a complementary rule to the principal purpose test, since doing so would potentially amplify the already excessive impact of this general anti-avoidance rule and, in any case, further jeopardize its interpretation.

Keywords: Avoidance; BEPS; general anti-avoidance rule; principal purpose test; tax treaties; treaty shopping (search for similar items in EconPapers)
Date: 2025
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DOI: 10.32721/ctj.2025.73.1.baezmoreno

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