On June 20th, 2016 the EU Member States adopted the Anti Tax Avoidance Directive. This Directive consist of five points which should counter harmful tax practices, but will definitely also affect all genuine business industry wide.
The five points of the ATA Directive are:
The majority of the rules above have to be implemented by the EU Member States before January 1th, 2019. The ATA Directive provides minimum requirements for EU Member States to implement in their national law. Consequently EU Member States will have a certain freedom while implementing the ATA Directive. For example an EU member state could choose to limit the deductibility of borrowing cost to say 20%.
The new Directive does not only affect companies that implemented tax (optimization) strategies but also affects companies that are not focusing on tax planning at all. Although implementation could be as far away as 2019, companies will need to anticipate on implementation of this new Directive when taking decisions on for example the (re)structuring and/or (re)financing of activities. Also existing structuring and financing of activities may need to be revised considering the implementation of the ATA directive.
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