JUNE 2017 MONTE- CARLO


The EU Anti Tax Avoidance Package: an update


[ NICKY GOUDER ]


ATAD I is applicable from 1 January 2019. An ATAD II is in the pipeline. The objective is to ensure that tax is payable where the profits and value are created. Transfers of assets and income streams is discouraged by an exit tax. The directive is applicable to corporate taxpayers. There are specific rules – on interest limitation, exit taxation, general tax avoidance, controlled foreign companies, hybrid mismatches. Member states have several options in implementing interest limitations. The exit tax rule applies even to transfers within the EU, which is illogical; the rule applies to transfers from a head office to a permanent establishment, transfers from a permanent establishment to the head office, transfers of residence or transfers of a PE business. Member states are required to have General Anti- Abuse Rule (GAAR) and a Controlled Foreign Company (CFC) rule. For the CFC rule, there are direct and indirect ownership tests and an effective tax rate test, rules on non-distributed incomes, substance and essential purpose. There are some opt-outs. The directive covers hybrid mismatches.


monte-carlo


SUMMARY OF THE MEETING 18-20 JUNE 2017


Transparency vs privacy: a call to action [ FILIPPO NOSEDA ]


THE CRS AND THE FOURTH ANTI MONEY LAUNDERING (AML) Directive call for the disclosure of much information. A fifth AML directive is on its way.


Initiatives by the OECD and US Treasury to curb tax evasion have called for more disclosure. The FATCA rules are long and complicated and are reflected in the CRS: they look through trusts and companies to ascertain those persons having control of them. In the ‘Facebook’ case, the ECJ warned against a generalised access to information. In 2016, the ECJ held that retention of information can breach the individual’s right to privacy. The issue of privacy goes beyond the prevention of tax evasion to the rights of personal privacy. It is inevitable that a test case will come before the ECJ. The FATCA questions are unacceptably complicated, and have been copied for the CRS. The position of discretionary beneficiaries is contradictory. The CRS is not really necessary. It is time to fight back.


028


THE ITPA GREEN BOOK 2018 www.itpa.org


The issue of privacy goes beyond the prevention of tax evasion to the rights of personal privacy.


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