Commission welcomes adoption of new rules to block tax avoidance

The European Commission has welcomed the formal adoption today by Member States of new EU rules to prevent tax avoidance via non-EU countries. The agreed rules will stop companies from escaping tax by exploiting the mismatches between Member States’ and non-EU countries’ tax systems (‘hybrid mismatches’).  Today’s agreement completes the Anti Tax Avoidance Directive (ATAD) which ensures that binding and robust anti-abuse measures are applied throughout the Single Market. “Our campaign for fairer taxation in Europe continues to reap results. Today’s agreement is further proof of what the EU can achieve when we work together against common challenges. It is another victory for fair taxation and another blow against those companies that try to escape paying their fair share,” said Pierre Moscovici, Commissioner for Economic and Financial Affairs, Taxation and Customs. Today’s agreement will ensure that companies cannot avoid taxation by abusing mismatches between countries’ tax treatment of certain income or entities, even if the mismatches involve third countries. The new rules will come into force on 1 January 2020, with a longer phasing-in period of 2022 for one provision. They build on the solid anti-avoidance safeguards initiated by the Juncker Commission and agreed at EU level. In addition to the ambitious Anti Tax Avoidance Directive, agreed in 2016, a host of new tax transparency rules have been adopted to ensure fairer and more open taxation throughout Europe. A full press release is available here.