On December 19, 2016 the Dutch Minister of Finance sent the Dutch House of Representatives an summary of the discussions that have been held during the EuroGroup meeting of December 5 and the ECOFIN Council of December 6, 2016. Obviously several subjects have been discussed during these meetings, but it was especially the summary of the discussions on the proposal for a Council Directive amending Directive (EU) 2016/1164 as regards hybrid mismatches with third countries as released by the European Commission on October 25, 2016 (Hereafter: ATAD2) that attracted our attention.

 

In this respect the Dutch Minister of Finance in the summary of discussions he sent to the Dutch House of Representatives states a.o. the following.

 

The ECOFIN Council has discussed what would be necessary to come to a political agreement on ATAD2. Within the ECOFIN Council there was broad support for the objectives of ATAD2 but no agreement could be reached yet on all points. Several Member States stated that they needed more time to study the ATAD2 proposal. The Netherlands emphasized the necessity that all companies pay tax and showed its willingness to come to an agreement. In particular, the United Kingdom pleaded for the inclusion of exemptions for capital instruments with a hybrid character that are held on the basis of prudential rules applying to financial institutions and for mismatches in connection with hybrid structures resulting from a payment by a financial trader in a so-called hybrid transfer. This could not be supported by all Member States. During the ECOFIN Council The Netherlands has indicated its willingness to reach an agreement during the meeting on ATAD2. The Netherlands has asked for a later implementation date than the implementation date that is now included in the proposal because of the impact the proposals will have for The Netherlands. In this respect The Netherlands is of the opinion that the Member States should have the option to implement the Directive on an earlier date. The Netherlands did not plead for a long-time deferral of the implementation date until January 1, 2024. The implementation date has not been further discussed during the ECOFIN Council. Nor did the Presidency come with new proposals regarding the implementation date. The coming time efforts will be made to come to a compromise on these issues with the goal that a political agreement can be reached as soon as possible.

 

 

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