On 12 July 2016 the Council formally adopted the anti tax avoidance directive (ATAD) and it will come into force on the 20th day after publication in the Official Journal of the EU. Member States will have until 31 December 2018 to transpose the majority of the ATAD’s provisions into national law.

The ATAD forms part of the anti tax avoidance package which was presented by the Commission in January this year. In particular it aims to strengthen rules against corporate tax avoidance and to prevent companies taking advantage of disparities between tax systems to reduce their tax liability.

The ATAD contains rules in the following areas:

  • Interest limitation rules
  • Exit taxation rules
  • Controlled foreign company rules
  • Hybrid mismatches rules
  • General anti abuse rules

We have explored these provisions in more detail in our April Brussels Agenda.

These rules will also build on the OECD’s 2015 recommendations to address tax base erosion and profit shifting.