On 20 June 2016 the EU’s Economic and Financial Affairs Council (“ECOFIN”) agreed on a draft Anti-Tax Avoidance Directive (“ATAD”). Rules in five different fields have been laid down: a) interest limitation rules; b) exit taxation rules; c) general anti-abuse rule (GAAR); d) controlled foreign company (CFC) rules and e) rules on hybrid mismatches. Substantial changes were made to the first proposal of the European Commission in January 2016. The draft will be formally adopted in a forthcoming ECOFIN meeting.
The member states will have to transpose the directive into their national laws and regulations before 1 January 2019, except for the exit taxation rules, which they will have to implement before 1 January 2020. Member States can postpone the implementation of the interest deduction limitation provision until 1 January 2024, subject to certain conditions.