Directive 2017/952 - Amendment of Directive (EU) 2016/1164 as regards hybrid mismatches with third countries - Main contents
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official title
Council Directive (EU) 2017/952 of 29 May 2017 amending Directive (EU) 2016/1164 as regards hybrid mismatches with third countriesLegal instrument | Directive |
---|---|
Number legal act | Directive 2017/952 |
Original proposal | COM(2016)687 ![]() |
CELEX number i | 32017L0952 |
Document | 29-05-2017; Date of adoption |
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Publication in Official Journal | 07-06-2017; OJ L 144 p. 1-11 |
Effect | 27-06-2017; Entry into force Date pub. +20 See Art 3 |
End of validity | 31-12-9999 |
Transposition | 31-12-2019; Adoption See Art 2.1 01-01-2020; Application See Art 2.1 31-12-2021; Adoption See Art 2.3 01-01-2022; Application See Art 2.3 |
7.6.2017 |
EN |
Official Journal of the European Union |
L 144/1 |
COUNCIL DIRECTIVE (EU) 2017/952
of 29 May 2017
amending Directive (EU) 2016/1164 as regards hybrid mismatches with third countries
THE COUNCIL OF THE EUROPEAN UNION,
Having regard to the Treaty on the Functioning of the European Union, and in particular Article 115 thereof,
Having regard to the proposal from the European Commission,
After transmission of the draft legislative act to the national parliaments,
Having regard to the opinion of the European Parliament (1),
Having regard to the opinion of the European Economic and Social Committee (2),
Acting in accordance with a special legislative procedure,
Whereas:
(1) |
It is imperative to restore trust in the fairness of tax systems and allow governments to effectively exercise their tax sovereignty. Therefore, the Organisation for Economic Cooperation and Development (OECD) has issued concrete action recommendations in the context of the initiative against Base Erosion and Profit Shifting (BEPS). |
(2) |
The final reports on the 15 OECD Action Items against BEPS were released to the public on 5 October 2015. This output was welcomed by the Council in its conclusions of 8 December 2015. The Council conclusions stressed the need to find common, yet flexible, solutions at Union level consistent with OECD BEPS conclusions. |
(3) |
In response to the need for fairer taxation and, in particular, to follow up on the OECD BEPS conclusions, the Commission presented its Anti-Tax Avoidance Package on 28 January 2016. Council Directive (EU) 2016/1164 (3), concerning rules against tax avoidance, was adopted in the framework of that package. |
(4) |
Directive (EU) 2016/1164 provides for a framework to tackle hybrid mismatches. |
(5) |
It is necessary to establish rules that neutralise hybrid mismatches in as comprehensive a manner as possible. Considering that Directive (EU) 2016/1164 only covers hybrid mismatches that arise in the interaction between the corporate tax systems of Member States, the ECOFIN Council issued a statement on 12 July 2016 requesting the Commission to put forward by October 2016 a proposal on hybrid mismatches involving third countries in order to provide for rules consistent with and no less effective than the rules recommended by the OECD report on Neutralising the Effects of Hybrid Mismatch Arrangements, Action 2 — 2015 Final Report (‘OECD BEPS report on Action 2’), with a view to reaching an agreement by the end of 2016. |
(6) |
Directive (EU) 2016/1164 recognises, inter alia, that it is critical for further work to be undertaken on other hybrid mismatches such as those involving permanent establishments. In view of that, it is essential that hybrid permanent establishment mismatches be addressed in that Directive as well. |
(7) |
In order to provide for a framework that is consistent with and no less effective than the OECD BEPS report on Action 2, it is essential that Directive (EU) 2016/1164 also include rules on hybrid transfers, imported mismatches and address the full range of double deduction outcomes, in order to prevent taxpayers from exploiting remaining loopholes. |
(8) |
Directive (EU) 2016/1164 includes rules on hybrid mismatches between Member States and should thus also include rules on hybrid mismatches with third countries where at least one of the parties involved is a corporate taxpayer or, in the case of reverse hybrids, an entity in a Member State, as well as rules on imported mismatches. Consequently, the rules on hybrid mismatches and tax residency mismatches should apply to all taxpayers that are subject to corporate tax in a Member State including to permanent establishments, or to arrangements treated as permanent establishments, of entities resident in third... |
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