martes, 21 de junio de 2016

No unanimous agreement on EU anti-tax avoidance directive

The EU Economic and Financial Affairs Council (ECOFIN) failed to reach political agreement on the EU anti-tax avoidance directive (ATAD) during its meeting on 25 May 2016. As a result of disagreements among the EU member states on certain measures included in the proposed directive (in particular, the anti-hybrid rule, the scope of the controlled foreign corporation (CFC) rule and the inclusion of the “switchover” clause), the topic has been postponed to the next ECOFIN meeting to be held on 17 June 2016. However, the ECOFIN did formally adopt the directive on the exchange of tax-related information between EU member states, which will implement recommendations under action 13 of the OECD base erosion and profit shifting (BEPS) project on country-by-country (CbC) reporting by multinationals, into a legally binding EU instrument.
The ATAD was released by the European Commission on 28 January 2016 as part of a broader package to prevent aggressive tax planning, boost tax transparency and create a level playing field for all businesses in the EU. The directive on the exchange of information also was included in the package, as were recommendations to EU member states on how to reinforce their tax treaties in an EU-law compliant manner and a communication on an external strategy for effective taxation.
The draft ATAD reflects some of the actions in the OECD’s BEPS project, although it goes further than BEPS in some areas. The first draft was followed by several updated drafts resulting from political discussions and compromises. The proposed ATAD would require all EU member states to introduce restrictions on interest deductibility, hybrid mismatch rules, CFC rules, a general anti-avoidance rule (GAAR) and an exit charge to prevent the shifting of assets or a company’s residence to a low-tax jurisdiction. A switchover rule would enable member states to deny tax exemptions if income had been taxed at a low or zero rate in a non-EU country before being remitted to the EU.
The first three proposed measures are found in the BEPS actions, but the GAAR, exit tax and switchover clause are not reflected in the project.
The measures EU member states have disagreed on include the scope of the anti-hybrid rule, which, as currently drafted, would apply only to hybrid mismatches within the EU – some member states have taken the position that the rule should apply to hybrid mismatches involving third countries.
The ECOFIN has asked the European Commission to prepare a proposal on hybrid mismatches involving third countries by October 2016. Areas of contention regarding the CFC rules relate to whether the rules should apply both within and outside the EU, the substance requirement and whether the burden of proof should be on the taxpayer or the tax authorities.
Finally, there is disagreement among the member states as to whether the switchover clause should be included in the ATAD at all, since it is not recommended as part of the BEPS actions. The switchover clause may be dropped in the final version of the ATAD. Enactment of a directive generally requires the unanimous agreement of all 28 EU member states. As a result, further drafting of the ATAD likely will be needed so that a compromise approach can be reached. A new round of voting will take place during the meeting scheduled for 17 June 2016. The Slovakian government (which takes over the presidency of the council of the EU from the Dutch on 1 July) has said that it also will push for an agreement if the draft is not agreed upon in June.
Source: Deloitte 

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