ECOFIN agrees EU-wide rules in Anti-Tax Avoidance Directive

Political agreement on the Anti-Tax Avoidance Directive (ATAD) was reached by the EU Member States in the Council of the EU, meeting through its Economic and Financial Affairs (ECOFIN) Council on 17 June. The agreement was subject to certain reservations which expired on 20 June.

ATAD is part of the Anti-Tax Avoidance Package (ATAP) originally presented by the EU Commission (EC) on 28 January 2016. The agreement requires all Member States to enact laws that largely implement G20/OECD base erosion and profit shifting (BEPS) outcomes on interest limitation rules, hybrid mismatches and controlled foreign companies (CFCs) as well as additional measures on exit taxation and a general anti-abuse rule (GAAR). The switch-over clause to require a tax credit rather an exemption on certain income, providing a minimum effective tax rate, was dropped as part of the compromise agreement.

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