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ECOFIN-Council agrees on measures against corporate tax avoidance and hybrid mismatches

On 21 February 2017, the European finance ministers reached an agreement in the ECOFIN-Council on provisions to fight corporate tax avoidance implicating third countries. The proposal aims at closing down “hybrid mismatches” between the tax systems of EU-countries and third countries and thus preventing corporate groups from taking advantage of the disparities between several tax jurisdictions.

In July 2016 the European Commission launched an Anti-Tax-Avoidance-Package, addressing the exploitation of incongruities between two or more tax systems within the European Union. Following the OECDs recommendations on corporate tax base erosion and profit shifting from 2015, the new Anti-Tax-Avoidance directive will now focus on third countries and complement the existing provisions accordingly. Member States have until 31 December 2019 to implement the new ATAD 2 directive into national law.

Press release on Council agreement on hybrid mismatches