Abstract

In the article the autors presents the new anti-abuse clause directed at eliminating abuse of double tax treaties, i.e. so-called Pricinple Purpose Test (further: PPT) clause. This new regulation comprises several imprecise conditions, which allow for an interpretative expansion to the detriment of taxpayers active in cross-border manner. The key overkill elements stemming from the PPT clause are criterion of "one of the principal pruposes" of the arrangement/transaction and lack of artificiality verification test. In light of the current case law of the Court of Justice of the European Union lack of the latter element – the artificiality test – makes compatibility of the PPT clause with the EU primary law questionable.