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ARTICLE · 13 MARCH 2021

Blue J And Gowling WLG Introduce Innovative Principal Purpose Test Tool

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The tool is the latest addition to the Canadian version of Blue J Tax and is available for immediate use by subscribers to the platform across the country.

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Today, Blue J, the leading provider of analytics for tax positions, and Gowling WLG, a leading international law firm, announced a new collaboration that has led to an advanced search tool for worldwide legal resources related to the interpretation of "principal purpose" in domestic legislation and treaties. The tool is the latest addition to the Canadian version of Blue J Tax and is available for immediate use by subscribers to the platform across the country.

Since entering into force in December 2019, the Multilateral Instrument (MLI) has modified a significant number of Canadian tax treaties. The introduction of a new anti-avoidance rule, in the form of the Principal Purpose Test (PPT) in Article 7 of the MLI, has raised potential uncertainty regarding access to tax treaty benefits. Furthermore, the courts and the Canada Revenue Agency (CRA) have yet to provide definitive guidance as to how the PPT may be satisfied.

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