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Policy

Global and EU work on tax fairness

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Anti-tax avoidance

As the economy becomes increasingly global, so the response to tax avoidance is also moving onto an international stage, with the OECD emerging as the leading organisation for creating new standards. Supporting its position, the EU is also taking action to address aggressive tax avoidance and improve global tax good governance. 

ATAD (I and II)

The Anti-Tax Avoidance Directive (ATAD I) was adopted in 2016 and implements three of the OECD BEPS standards in the EU. It introduces rules on interest deductibility, exit taxation, a general anti-abuse provision, controlled foreign companies and hybrid mismatches. In May 2017, the EU amended the Anti-Tax Avoidance Directive to extend its scope to hybrid mismatches involving third countries.

How does it affect private equity?

ATAD I and ATAD II are key for private equity, as the rules have an important bearing on interest deductibility. As a result of ATAD II rules in particular, some funds could become taxable contingent on how investors treat them from a tax perspective in their country. The impact of ATAD II provisions could be primarily relevant for fund structures which are funded with shareholder debt.

 

BEPS action 6

Action 6 of the OECD Base Erosion and Profit Shifting (BEPS) project released in summer 2013 identified tax treaty abuse, and in particular tax treaty shopping, as a major concern. In December 2017, the OECD released the updated OECD Model Tax Convention, which included three examples that provide guidance on how the Principal Purposes Test (PPT) will apply to alternative investment funds.

How does it affect private equity?

Although targeted at the aggressive tax policies of large multinational corporations, the OECD BEPS standards have the potential to change existing tax rules more generally. This could alter the tax environment for private equity funds as they raise capital and invest internationally. Specifically, changes to the rules on treaty abuse may pose risks to the continuing ability of private equity funds to access tax treaties that prevent double taxation when a fund invests cross-border.

Anti-tax avoidance library

Guidance

2018 Invest Europe Tax Benchmark Study

14 Jun 2018
Download PDF 14.43 MB
Positions & consultation responses

Response to Capital Markets Union Mid-Term Consultation

17 Mar 2017
Download PDF 446.9 KB
Positions & consultation responses

Joint Letter Invest Europe/AIC on OECD BEPS Action 6

03 Feb 2017
Download PDF 612.94 KB
Positions & consultation responses

Position Paper on the European Commission Anti-Tax Avoidance Package

16 Mar 2016
Download PDF 793.71 KB
Positions & consultation responses

Response to European Commission Call for Evidence on EU Regulatory Framework for Financial Services

31 Jan 2016
Download PDF 474.66 KB
Positions & consultation responses

Response to Commission consultation on the Common Consolidated Corporate Tax Base (CCCTB)

08 Jan 2016
Download PDF 659.78 KB
Positions & consultation responses

EVCA-PAE Response to OECD-BEPS Action 6 - Treaty Abuse

17 Jun 2015
Download PDF 512.67 KB
Positions & consultation responses

EVCA-PAE Response to Green Paper on Capital Markets Union

13 May 2015
Download PDF 1.11 MB
Positions & consultation responses

EC Green Paper on Capital Markets Union

18 Feb 2015
Download PDF 235.29 KB
Positions & consultation responses

Joint PEGCC/PAE Letter to the OECD on Interest Deductibility

06 Feb 2015
Download PDF 448.73 KB
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Meet the team

Public Affairs

Erika Blanckaert Image

Erika Blanckaert

Public Affairs

Senior Public Affairs Manager

Simon Tosserams Image

Simon Tosserams

Public Affairs

Senior Public Affairs Officer

Christophe Verboomen Image

Christophe Verboomen

Public Affairs

Senior Public Affairs Officer

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