On 10 September 2024, ETAF participated in the European Commission's evaluation of the Anti-Tax Avoidance Directive (ATAD). We welcome this evaluation as a concrete action in the framework of the ongoing European Commission’s effort to rationalise EU reporting requirements.
ETAF views the ATAD as an important tool laying down minimum standard measures on addressing the most common forms of aggressive tax planning and tax avoidance practices that directly affect the functioning of the internal market. However, our members found that the ATAD provisions have been implemented inconsistently across Member States, with some opting for excessive measures leading to further fragmentation, unnecessary bureaucracy and double taxation.
Additionally, the introduction of the Minimum Tax Directive has created some duplication with the ATAD Directive resulting in additional burden for taxpayers. In particular, the relation between the Minimum Tax Directive and the Controlled Foreign Company rule in the ATAD1 needs clarification as both aim to prevent tax avoidance by transferring income to low-tax jurisdictions, and overlap in their scope of application.
Therefore, ETAF’s feedback focuses on the identified implementation challenges and the coherence with other EU Directives.
