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Cathy's research will look at "Canada, the Multilateral Instrument and the Principal��Purpose test-Implications for Canadian corporations in cross border transactions."

The Organization for Economic Co-operation and Development (“OECD”) released a new Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (MIL) in 2016. One of the objectives of the new instrument, which will become fully effective in 2020, is to��combat treaty shopping. It is considered a highwater mark in achieving global consensus to combat tax avoidance. Canada signed the MLI in 2017. Bill C-82, an Act to implement the MLI is currently in the process of implementation. Canada has listed 73 of its 93 tax treaties, which will be affected by the MLI when the Bill receives Royal Assent\

The research project will examine a number of practical issues arising out of Canada’s decision to sign the MLI. For example, how will the implementation of the MLI change Canada’s existing tax treaties? How will the treaty shopping rules in the MLI interact with Canada’s General Anti-Avoidance Rules (“GAAR”) to prevent or inhibit treaty shopping activities by Canadian corporations and their related offshore structures? How will the interpretive rules used by other jurisdictions potentially impact the taxation of Canadian corporations and their related offshore structures? What jurisdictions and territories are not affected by the MLI and what potential impact will this have on treaty shopping for Canadian corporations? The overall objective of the research is to provide a broad base for understanding treaty shopping, the global emerging tests for what constitutes tax avoidance and treaty shopping under the MLI and the potential impact on Canadian corporations.