Under the new CIT Act, an entity’s taxable income does not include dividends received from other entities and income arising on the sale of shares held for at least 36 months. In either case, however, this exemption is not available if the entity or its related party was formed or a particular transaction carried out for the main purpose of claiming any of the exemptions under the CIT Act or the PIT Act. Applying these rules is crucial in a structure that involves two or more entities. This article explores how the State Revenue Service (SRS) could evaluate such cases in the light of the Cabinet of Ministers’ new draft Regulation, and what criteria the OECD suggests for assessment internationally.