The report on Action 6 (Preventing treaty abuse) has further developed the alternative limitation of benefit (LoB) and principal purpose test (PPT) provisions. On the LoB, the draft article may cause problems for common structures; the commentary recognises EU law sensitivities; further work on simplified and detailed articles and commentary is to be done in 2016. The PPT is widely formulated and the absence of standard application procedures is disappointing. The report further develops existing trends towards ensuring that tax treaties do not encroach on domestic anti-avoidance rules and are not a tool for residents of a state to reduce their tax burden in their home state.
