The line between tax planning and tax avoidance isn’t being redrawn overnight. But it is getting sharper, with every recent ruling. If you advise on offshore structures, this shift matters.
Because the conversation is quietly moving from: “Do you have a TRC?” to “Do you have real substance?”
What recent rulings and trends are reinforcing:
Paper residency is no longer enough on its own – Tax Residency Certificates still matter, but they’re no longer the end of the discussion.
Substance is being tested more deeply – Where are decisions made? Who is actually in control? What risks are being borne and by whom?
Speed of interpretation is increasing – Positions are being evaluated and challenged faster than before, especially where facts are weak.
At the same time, there’s an interesting counterbalance: On technical grounds, courts and tribunals are also being precise about how anti-avoidance rules apply, including how treaty modifications (like MLI provisions) come into effect.
So the direction is clear: Stricter on substance, but equally strict on procedure
What this means in practice:
Structures built only on treaty jurisdiction, documentation, and form are increasingly vulnerable. What holds up today is commercial rationale, functional substance and decision-making evidence.
The real shift isn’t legal. It’s evidentiary.
The question is no longer: “Does this structure work on paper?” It’s: “Would this structure stand up to scrutiny – fact by fact, year after year?”
Because today, if the story doesn’t hold, the position won’t either.
