Europe's patchwork of tax avoidance regulations to take effect in 2020
European finance ministers have now initiated new rules to tackle tax avoidance by multinationals that capitalise on “hybrid mismatches” between both member countries and non-EU countries’ tax systems. Hybrid mismatch is when a cross-border activity is dealt with differently by the relevant countries for tax reasons, therefore, leading to beneficial tax treatment. Member countries have until the 1st of January 2020 deadline to transpose the Anti-Tax Avoidance Directive (ATAD) into their national legislation.
In the fight against offshore tax evasion, member countries have been required to communicate on financial accounts since January 2017. Since July 2017, multinational companies now have to present tax reports of each country to the authorities by the end of the year and so, follow coinciding transparency rules. According to CCH Daily, the home of Accountancy Live, the EU is due to introduce a transparency directive for intermediaries having to report on their cross-border tax planning systems.
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