Questions and answers on the Anti Tax Avoidance Package.
The Anti Tax Avoidance Directive sets out five key anti-avoidance measures, which all Member States should apply, to counter-act some of the most common types of aggressive tax planning (as identified in the discussions at the OECD, in Council discussions on tax avoidance and in the Study on Aggressive Tax Planning that we also published on 28 January). These are:
a) Controlled Foreign Company (CFC) rule: To deter profit shifting to no or low tax countries
b) Exit Taxation: To prevent companies from re-locating assets purely to avoid taxation
c) Interest Limitation: To discourage companies from creating artificial debt arrangements designed to minimise taxes
d) Hybrids: To prevent companies from exploiting national mismatches to avoid taxation
e) General Anti-Abuse Rule: To counter-act aggressive tax planning when other rules don't apply.