CFE Tax Advisers Europe has published an Opinion Statement responding to the European Commission public consultation on the evaluation of the EU’s EU Anti-Tax Avoidance Directive (“ATAD”), Council Directive (EU) 2016/1164 of 12 July 2016 as amended by Council Directive (EU) 2017/952 of 29 May 2017.
CFE’s comments do not relate to the Commission’s focus on quantitative assessment of the effectiveness of the measures as a minimum standard for addressing aggressive tax planning, nor to aspects such as evaluation of budget revenue generated as a result of the measures or costs for the stakeholders concerned, in particular tax administrations and affected businesses, as we do not possess such evidence nor data. Furthermore, CFE notes the difficulty in assessing ATAD’s effectiveness is partly due to delayed implementation in some Member states of the EU, the requirement for tax authorities to audit companies and apply ATAD provisions, and the lack of published decisions on ATAD application.
CFE would like to highlight the following key points from its Opinion Statement:
- ATAD poses a significant compliance burden and implementation has resulted in increased complexity, particularly when layered on top of existing national rules. CFE’s primary remarks is the complexity of the EU’s anti-avoidance framework is potentially hindering the EU’s competitiveness and ease of doing business. CFE notes the urgent need to create a more coherent tax-avoidance structure and reduce complexity in EU tax rules.
- ATAD has been effective in establishing the EU’s anti-avoidance system and changing mentality, however its implementation has led to increased administrative burdens for businesses. The lack of comprehensive data makes it challenging to fully assess ATAD’s effectiveness.
- There is an urgent need to align ATAD with newer initiatives such as EU’s Directive on Minimum Tax (Pillar Two) and create a more coherent structure for EU tax rules. CFE notes the need for further simplification, to improve on the clarity of concepts and the need to implement definitions. CFE’s emphasises the need to “declutter” the EU’s anti-avoidance legislation (ATAD and partly DAC6), especially for companies in scope of Pillar Two, to reduce complexity and potential redundancies or duplication in reporting requirements.
We invite you to read our Opinion Statement and remain available for any queries you may have.