Anti Tax Avoidance Directive (ATAD)
The EU Anti Tax Avoidance Directive (ATAD) underpins the EU Commission's Action Plan to fight corporate tax avoidance. In essence, the ATAD obliges EU Member States to introduce minimum, legally binding anti-corporate tax avoidance rules. We help you to design a strategy that suits your business.
ATAD will not only have a substantial impact on the corporate tax position of EU businesses. Besides a broader corporate tax profit base in EU countries, ATAD will also impact certain Swiss business operations of multinational enterprises. In particular Swiss IP, intra group financing and principal / trading operations should be reviewed in the light of ATAD. Diverging implementation of ATAD in various EU countries will create uncertainties in the application of these new anti-abuse rules.
In brief, the ATAD lays down the following de minimis rules against corporate taxation avoidance:
- Interest deduction limitation to in principle 30% of EBITDA of a company;
- A general anti-abuse rule (GAAR);
- Controlled foreign company (CFC) legislation applicable to both EU and third countries;
- Anti-hybrid mismatch rules applicable to both EU and third countries;
Most ATAD rules must be implemented as per 1 January 2020.
Our ATAD Services
We believe that the devil will be in the implementation details. ATAD is likely to create significant uncertainty on EU cross border corporate taxation. We keep a close look at how various EU Member States are implementing ATAD and analyse consequences for Swiss business. Our team can help you to develop an initial inventory of the likely impact of ATAD on your group companies in the main EU Member States.
Our ATAD Team
Our ATAD team consists of a mix of Swiss corporate tax lawyers and EU corporate tax lawyers not only disposing of all necessary expertise and experience, but also of the helicopter view to assess ATAD in the context of a Swiss business. We can assist in designing a tax strategy to mitigate the potential adverse tax consequences of ATAD to your business in the EU, including the necessary modifications to your group structure, intra group finance operations, IP structures, etc.