Common use of Prejudicial or Restrictive Measures Clause in Contracts

Prejudicial or Restrictive Measures. 1. Neither of the Contracting Parties shall apply prejudicial or restrictive measures based on harmful tax practices to residents, nationals or transactions of either Contracting Party so long as this Agreement is in force and effective. 2. A "prejudicial or restrictive measure based on harmful tax practices" is a measure applied by one Contracting Party to residents, nationals or transactions of either Contracting Party on the basis that the other Contracting Party does not engage in effective exchange of information and/or because it lacks transparency in the operation of its laws, regulations or administrative practices, or on the basis of no or nominal taxes and one of the preceding criteria. 3. Without limiting the generality of paragraph 2 of this Article, the term "prejudicial or restrictive measure" includes: (a) the introduction of any tax law or administrative arrangements that specifically and adversely target taxpayers of one Contracting Party conducting business activities or investing in the other Contracting Party; or (b) the denial of a deduction, credit or exemption, the imposition of a tax, charge or levy, or special reporting requirements. 4. A “prejudicial or restrictive measure” does not include generally applicable measures, applied by either Contracting Party, such as Controlled Foreign Company rules, Foreign Investment Fund rules, transfer pricing rules, thin capitalisation rules, or general information reporting rules that relate to the disclosure of information from other countries or jurisdictions, or transactions with such countries or jurisdictions, such as record keeping requirements imposed on foreign owned subsidiaries to ensure access to information concerning parent companies.

Prejudicial or Restrictive Measures. 1. Neither of the Contracting Parties shall apply prejudicial or restrictive measures based on “harmful tax practices practices” to residents, residents or nationals or transactions of either Contracting Party so long as this Agreement is in force and effective. 2. A "prejudicial or restrictive measure based on harmful tax practices" is a measure applied by one Contracting Party to residents, residents or nationals or transactions of either Contracting Party on the basis that the other Contracting Party does not engage in effective exchange of information and/or because it lacks transparency in the operation of its laws, regulations or administrative practices, or on the basis of no or nominal taxes and one of the preceding criteria. 3. Without limiting the generality of paragraph 2 of this Article, the term "prejudicial or restrictive measure" includes: (a) the introduction of any tax law or administrative arrangements that specifically and adversely target taxpayers of one Contracting Party conducting business activities or investing in the other Contracting Party; or (b) the denial of a deduction, credit or exemption, the imposition of a tax, charge or levy, or special reporting requirements. 4. A “"prejudicial or restrictive measure” " does not include generally applicable measures, applied by either Contracting PartyState, such as Controlled Foreign Company rules, Foreign Investment Fund rules, Transferor Trust rules, transfer pricing rules, thin capitalisation rules, the operation of dual exempt and foreign tax credit systems or general information reporting rules that relate to the disclosure of information from other countries or jurisdictions, or transactions with such countries or jurisdictions, such as record keeping requirements imposed on foreign owned subsidiaries to ensure access to information concerning parent companies.