On 29 May 2017, the Council of the European Union (the EU Council or Council) adopted the Directive amending the Anti-Tax Avoidance Directive (ATAD). This Directive, known as ATAD 2, extends the scope of ATAD to hybrid mismatches involving third countries (i.e., non-EU countries). Additionally, ATAD 2 encompasses forms of hybrid mismatches not covered by ATAD. The content of ATAD 2 corresponds to that agreed by the ECOFIN on 21 February 2017.


Formal adoption of ATAD 2 by the Council was dependent on the delivery of the opinion of the European Parliament, which was issued on 27 April 2017.
ATAD 2 aims at implementing the Organisation for Economic Co-operation and Development (OECD) and G-20 recommendations on neutralizing the effects of hybrid mismatch arrangements (final report on Action 2 of the Base Erosion and Profit Shifting (BEPS) project).

Scope of the ATAD 2

With the ATAD 2, the European Commission seeks to establish minimum rules that neutralize hybrid mismatches, where at least one of the parties involved is a corporate taxpayer in an EU Member State. In addition to expanding the territorial scope of the ATAD to third countries, the ATAD 2 also expands the scope to address hybrid permanent establishment (PE) mismatches, hybrid transfers, imported mismatches, reverse hybrid mismatches and dual resident mismatches.
The ATAD 2 would only apply in the case of a hybrid mismatch between "associated enterprises," between the head office and PE, between two or more PEs of the same entity or under a "structured arrangement."
As the ATAD 2 is in response to the OECD BEPS conclusions outlined in the Action 2 report, and prescribes Member States to implement the ATAD 2 in their domestic laws and regulations, the ATAD 2 explicitly states that Member States should use the applicable explanations and examples outlined in the Action 2 report as a source of illustration or interpretation to the extent that they are consistent with the provisions of the ATAD 2 and EU Law.

Deadline for implementation by Member States

Member States will have until 1 January 2020 to transpose the Directive into national laws and regulations (1 January 2022 for the implementation of reverse hybrid mismatches).


The ATAD was an unprecedented change in European direct taxation and it will have a significant effect on the taxation of multinational companies operating in the EU. This ATAD 2 completes the picture by tackling mismatches with third countries and significantly expanding the scope of the ATAD to hybrid PE mismatches, hybrid transfers, imported mismatches, reverse hybrid mismatches and dual resident mismatches that may have far reaching consequences for taxpayers operating in the EU.

Bron: EY

Informatiesoort: Nieuws

Rubriek: Europees belastingrecht, Vennootschapsbelasting


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