By Davide Anghileri, University of Lausanne, Switzerland
On 19 August, the EU Commission released a report to the European Parliament and to the EU Council on the implementation of the Council Directive 2016/1164, which lays down rules against tax avoidance practices that directly affect the functioning of the internal market. The report also covers amendments made by Council Directive (EU) 2017/9522 regarding hybrid mismatches with third countries. These anti-tax avoidance directives are commonly referred to as the “ATAD.”
The report is intended to be the first step in the evaluation of the impact of the ATAD and provides an overview of the implementation of the ATAD measures with early effective dates across member states.
The report notes that four member states, Austria, Denmark, Spain, and Ireland, have not yet fully complied with their obligations to adopt and notify transposition measures with regard to the interest limitations, general anti-abuse rules (GAAR), and controlled foreign corporation rules.
Hence, the Commission opened ex officio infringement procedures for failure to implement the necessary measures.
Moreover, the Commission opened infringement cases against the member states that failed to implement national measures for exit taxation and hybrid mismatches, notably Germany, Greece, Latvia, Portugal, Romania, and Spain.
A procedure was also opened against Cyprus, Germany, Greece, Latvia, Poland, Romania, and Spain, as these countries failed to notify national implementing measures for hybrid mismatches.
The report anticipates that a comprehensive evaluation of the ATAD measures will be published in another report, preferably by 1 January 2022.
However, it points out that the timing of the completion of such a comprehensive evaluation report will be dependent to some extent on the need to revise the ATAD due to EU or other international developments in the discussions on preventing corporate tax avoidance practices.
Davide Anghileri
Davide Anghileri is a PhD candidate at the University of Lausanne, where he is writing his thesis on the attribution of profits to PEs. He researches transfer pricing issues and lectures for the Master of Advanced Studies in International Taxation and Executive Program on Transfer Pricing.
Anghileri, a Contributing Editor at MNE Tax, previously worked as a policy advisor to the Swiss government on BEPS issues.
Davide can be reached at [email protected].
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