Anti-Abuse Rules in International Tax Law and their Interactions

1. Introduction

The preamble of any legal document serves as its introduction setting the tone, context, and purpose of the text that follows. Serving as a guide to the purpose and intent behind these agreements, the preamble has historically played a subtle yet significant role in shaping the interpretation and application of tax treaties across jurisdictions. However, with the advent of the Multilateral Instrument S. 126(MLI) and the introduction of a new wording of the preamble, its relevance in the context of international tax law has gained renewed attention.

This paper seeks to explore the evolving importance of the preamble in the OECD Model Convention and its interaction with anti-abuse rules, in particular in light of recent developments. The analysis will begin with an examination of the role of the preamble in international law, setting the stage for a deeper understanding of its interpretative function. Following this, the evolution of the preamble within the OECD Model Convention will be traced, highlighting the shifts in its language and the implications of these changes.

A focal point of this study is the new preamble introduced in a large number of tax treaties through the MLI tha...