On 28 January 2016, the EU Commission presented its Anti-Tax Avoidance Package. The continuing political will to address tax avoidance may result in the 100% consensus required by EU Member States to effect the proposed tax changes. The EU-28 governments will have to decide if they are willing to go further than the G20/OECD BEPS outcomes on interest limitation rules, hybrid mismatches, CFCs, tax treaty abuse and PEs.
Reaching agreement on additional areas addressed in this package may be more difficult. These areas include legislative proposals on harmonized exit taxation, general anti-avoidance rules and switch-over clauses, effectively providing for a minimum level of taxation with tax credit relief rather than exemption. Member States and other stakeholders likely will debate elements of the strategy for increased tax transparency (including public CBCR), fairer tax competition, State aid and good governance criteria including action against ‘listed’ countries that don’t adhere to these criteria.
European Commission proposes Anti-Tax Avoidance Package
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