The Council of the European Union has officially endorsed new rules to prevent tax avoidance via non-EU countries.
The agreement was settled in order to put an end to hybrid mismatches and complete the Anti-Tax Avoidance Directive (ATAD) last February at the informal European Council in Malta. In addition, the ATAD assures that binding and powerful anti-abuse standards are employed throughout the Single Market.
Following this, hybrid mismatches are established in order to prevent businesses from taking advantage of variations between tax systems of EU member states and third countries, due to the fact that taxation continues to be a national competence of the member countries.
The new regulations will come into action from the 1st of January 2020, with an extended phasing-in period of 2022 for one provision.
Moreover, an array of new tax transparency rules has now been approved in order to establish more open and fairer taxation throughout Europe.