During its meeting of July 12, 2016 the (EU) Economic and Financial Affairs Council (ECOFIN) formally adopted a Council Directive laying down rules against tax avoidance practices that directly affect the functioning of the internal market adopted. The aim of the Directive is to combat some of the practices most commonly used by large companies to reduce their tax liability.

The Directive lays down anti-tax-avoidance rules for situations that may arise in five specific fields: 

·   Interest limitation rules.

·   Exit taxation rules, to prevent tax base erosion in the state of origin.

·   General anti-abuse rule.

·   Controlled foreign company (CFC) rules.

·   Rules on hybrid mismatches.

On the website of the Council of the European Union a Draft version of the Council Directive is published which can be found here. Also a ‘Corrigendum’ is published on the website of the Council of the European Union, which can be found here.

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