Blue J and Gowling WLG Introduce Innovative Principal Purpose Test Tool

Mar 9, 2021

Today, Blue J, the leading provider of analytics for tax positions, and Gowling WLG, a leading international law firm, announced a new collaboration that has led to an advanced search tool for worldwide legal resources related to the interpretation of “principal purpose” in domestic legislation and treaties. The tool is the latest addition to the Canadian version of Blue J Tax and is available for immediate use by subscribers to the platform across the country.

Since entering into force in December 2019, the Multilateral Instrument (MLI) has modified a significant number of Canadian tax treaties. The introduction of a new anti-avoidance rule, in the form of the Principal Purpose Test (PPT) in Article 7 of the MLI, has raised potential uncertainty regarding access to tax treaty benefits. Furthermore, the courts and the Canada Revenue Agency (CRA) have yet to provide definitive guidance as to how the PPT may be satisfied.

The new Principal Purpose Test module enables users to quickly pinpoint documents that are relevant to analyzing the application of Article 7(1) of the MLI. This advanced search function includes commentary from the Organisation for Economic Co-operation and Development (OECD) and the CRA with respect to treaty shopping, as well as related Canadian case law and revenue rulings and interpretations that shed light on the interpretation of principal purpose in the context of the ITA. Furthermore, the module can be used to identify relevant case law, rulings and interpretations as they relate to other instances of “principle purpose tests” in the ITA.

“We’re thrilled to collaborate with Gowling WLG,” says Benjamin Alarie, Co-founder and CEO of Blue J. “Gowling WLG’s Tax Practice is consistently recognized as a leading provider of tax law services in Canada with significant international tax expertise. We’re excited to provide this solution for expert tax professionals on our updated Blue J Tax platform, and we look forward to helping streamline the analysis of this complex area for tax professionals across Canada.”
“Collaborating on this feature with Blue J supports our collective objective of making principal purpose test decisions and other resources more transparent and actionable for Canadian business,” said John Sorensen, a partner and co-leader of Gowling WLG’s Tax Dispute Resolution team.

“The combination of Gowling WLG’s tax expertise and practical experience and Blue J’s proprietary methodology have led to an innovative tool that simplifies advice regarding the principal purpose test,” adds Laura Gheorghiu, a partner in Gowling WLG’s National Tax Practice Group.

The new tools are a critical investment for Blue J, as the company continues to expand its Canadian operations with new platform updates.

About Blue J

Blue J uses machine learning and artificial intelligence to make the law more transparent and accessible. The company’s technology saves users hours of time and offers confident answers in challenging circumstances. While the company’s initial focus is on tax and employment law, the technology is versatile and is being extended to cover other areas of law in the U.S., Canada, and around the world. For more information, visit

About Gowling WLG

With more than 1,400 legal professionals in 19 cities worldwide, Gowling WLG provides clients with in-depth expertise in key global sectors and a suite of legal services at home and abroad. Gowling WLG’s Tax Group is recognized by Chambers Global and the International Tax Review as a leading law firm in the areas of tax, transfer pricing, tax planning and indirect tax. For more information, visit