On 12 July 2016, the Council of the European Union adopted the Anti-Tax Avoidance Directive (the Directive) laying down rules against tax avoidance practices that directly affect the functioning of the internal market. Political agreement on the Directive was reached on 17 June 2016, following a silence procedure.
The Directive covers all taxpayers that are subject to corporate tax in a Member State, including subsidiaries of companies based in third countries. It lays down anti-tax-avoidance rules for situations that may arise in five specific fields:
Member States will have until 31 December 2018 to transpose the Directive into their national laws and regulations, except for the exit taxation rules, for which they will have until 31 December 2019. Member States that have targeted rules that are equally effective to the interest limitation rules may apply them until the OECD reaches agreement on a minimum standard, or until 1 January 2024 at the latest.