The PPT raises familiar issues of the relationship between a GAAR and SAAR
The author, in discussing the principal purpose test (PPT) in the Multilateral Instrument, and its relationship to specific anti-avoidance rules (SAARs), suggests:
If a purported abusive arrangement can be dealt with by the PPT and a SAAR, the SAAR should prevail, provided that the SAAR does cover the same situation. In conclusion, it can be argued that the determining factor in applying the PPT is deciding whether any SAAR would be able to deal with the facts of the specific case in question. …
The concept of beneficial ownership had been looked to as a prime tool to address Treaty shopping. Post-PPT it is suggested that:
The prima facie conclusion is that the OECD has narrowed the application of the beneficial ownership tests in favour of the use of the PPT and the LOB due to the greatly varying interpretation of the concept of “beneficial ownership” worldwide. This is evidenced by the fact that a number of examples in the Commentary on Article 29 of the OECD Model (2017), such as Examples A and B … are based on fact patterns of past cases argued on the basis of beneficial ownership clauses.
Neal Armstrong. Summaries of Ian Zahra, “The Principal Purpose Test: A Critical Analysis of Its Substantive and Procedural Aspects – Part I,” Bulletin for International Taxation, November 2019, p. 609 under Treaties – Multilateral Instrument – s. 7(1).