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    Anti Tax Avoidance Directive update

    A few months ago Dutch State Secretary of Finance Eric Wiebes (State Secretary) met with the European Parliament's special Tax Committee to discuss the tax policy priorities for the European Union over the coming months. During this discussion, the State Secretary stated that he aims to finalize the proposed Anti Tax Avoidance Directive (ATAD) before the summer.

    The State Secretary emphasized that the Dutch Presidency of the Council of the European Union (the Presidency) entered into the discussions about the ATAD immediately after its proposal was published by the European Commission on 28 January 2016.

    Letters from the State Secretary regarding the ATAD from April 2016 (number AFP/2016/342 and number AFP/2016/394).

    The State Secretary answered several questions of the Lower House of Parliament (Lower House) regarding the ATAD by letters of 15 April 2016 and 29 April 2016. The answers include the following statements:

    The State Secretary confirmed that he will follow up on the earlier concluded information agreements with the Lower House; The State Secretary confirmed that he will inform the Lower House on a step-by-step-basis about the negotiation process regarding the ATAD; The State Secretary indicated that the negotiations regarding the ATAD are ongoing; Part of the ATAD is the so called 'switch-over clause'. This means that Member States must apply a credit system for certain types of foreign income which originate from third countries instead of an exemption. The State Secretary confirmed that in the current ATAD-proposal the switch-over clause will only apply to foreign income that does not arise from active business. Based on the current proposal the State Secretary expects that the switch-over clause will no longer compromise the participation exemption; The State Secretary reiterated that the Controlled Foreign Company rules (CFC-rules) should be restricted to income that does not arise from an active business; and Regarding the establishment of a blacklist of non-cooperative jurisdictions, the State Secretary considered it necessary to apply unambiguous criteria on which such non-cooperative jurisdictions can be identified.

    During the latest meetings the Presidency has presented several compromise proposals in which the comments from Member States during previous meetings were taken into account. The Dutch government aims to reach a political agreement regarding the ATAD-proposal tomorrow at the Ecofin-meeting (25 May 2016).

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