Can the CRA provide examples of any fact patterns on which rulings have been requested or granted under the MLI; and any fact patterns on which the CRA has applied the principal purpose test (PPT)?
CRA noted that as part of the introduction of the MLI, 13 examples were provided back in 2015 by the OECD on the application of PPT and that additional examples were provided in 2017. No comments or reservations were made by Canada regarding those examples, and it will look at those examples for guidance in interpreting the anti-avoidance rule under the MLI.
As part of its role respecting application of the PPT and GAAR, the Treaty Abuse Prevention Committee and the CRA might ask a number of questions, including, what are the direct and indirect results of the arrangement or transaction that is investigated; what are the surrounding circumstances and what do they say about the intended results; could non-tax objectives have been achieved in a different way; and what are the non-tax benefits related to some of the actions or steps, including the creation of entities or changes of residence.
No ruling request has yet been made on the application of the PPT, and there has been no audit activity.