The MLI may have interpretive effects on existing Treaties even where their provisions are not directly changed by the MLI

It is unclear how the principal purpose test in Art. 7(1) of the Multilateral Instrument will be applied for Treaties where there already was a PPT (often, more narrowly worded.)

While some countries that have experience applying PPT-type rules might be expected to apply the new PPT in line with their past practice, the breadth of the new PPT would permit for substantially more aggressive approaches by countries inclined to take them.

Option A in MLI Article 13 provides that existing activity exceptions in Treaties would apply only where the activity is of a "preparatory or auxiliary" character, whereas Option B would do the opposite, and would provide that the existing activity exemptions are per se exceptions. Although the OECD had concluded that existing Treaty provisions already provided per se exceptions for locations at which only a single listed activity was conducted, the presence of these Options may cause uncertainty where countries choose neither Option.

If a source country adopts the expanded PE standard in its domestic law but its Treaty partner does not, the source country nonetheless may view a structure that does not rise to the level of a PE under the existing unmodified Treaty, as being subject to the PPT.

Parties are permitted under the MLI Arbitration provisions (Part VI) to craft their own reservations with respect to the scope of cases that will be subject to arbitration. If the other party objects to such "free form" reservations, Part VI will not apply to their Treaty. Of the 26 countries that chose to adopt Part VI, 16 made such "free form" reservations. Many of the reservations involve carving out broad, and often vague, categories of cases, including, for example, all cases involving the application of domestic anti-avoidance rules, or all cases involving serious penalties. Canada is mentioned as an example.

Neal Armstrong. Summaries of Manal Corwin and Jesse Eggert, "Understanding the Operation, Impact, and Practical Implications of the MLI", Tax Management International Journal, Vol. 46, No. 8, 11 August 2017, p. 407 under Multilateral Instrument, Art. 7, 13 and 28.