ATAD II

On 29 May 2017, the Council of the European Union adopted  Directive 2017/952/EU (“ATAD II”) amending the Anti-Tax Avoidance Directive (Directive 2016/1164/EU “ATAD I”). The aim of ATAD II is to put in place a dissuasive regime regarding hybrid mismatches (being for instance the result of differences in the characterisation of financial instruments) with third countries (i.e. non-EU Member States), thus widening the scope of ATAD I.

The geographic expansion comes alongside a broadening of the material scope of ATAD, such as an inclusion of permanent establishment mismatches, hybrid transfers, imported mismatches, reverse hybrid mismatches as well as dual resident mismatches.

The provisions of ATAD II will have to be implemented by Member States by 31 December 2019 at the latest, and be applicable as of 1 January 2020, with the exception of the reverse hybrid entity rule, which will have to be implemented into national law by 31 December 2021 and be applicable as of 1 January 2022.

For further insight on this directive, see the article Atad II published on our website.