Michael McGrath
Question:366. Deputy Michael McGrath asked the Minister for Finance the timeframe for the implementation of the anti-tax avoidance directive; and if he will make a statement on the matter. [26413/16]
View answerFriday, 16 September 2016
Questions (366)
Written answers
The Anti-Tax Avoidance Directive was agreed by Member States following ECOFIN on 17 June 2016. The Directive includes five significant corporate tax anti-avoidance measures. Three of the measures derive from the non-binding elements of the OECD BEPS process, with the remaining two measures coming from the European Commission's previous Common Consolidated Corporate Tax Base (CCCTB) Directive.
With regards to the measures that are derived from the non-binding elements of the BEPS process, namely the controlled foreign company rules, the hybrid mismatch rules and the interest limitation rules, these measures must be implemented by Member States by 01 January 2019. However, the provisions on interest deductions (the interest limitation rule) may be deferred until 2024 for countries that already have strong targeted interest rules.
The Directive also proposes that an exit tax must be applied when a company moves its residence, its assets or a branch out of a Member State. Ireland currently has an exit tax which will be reviewed to determine what changes may be needed to ensure it is in line with the Directive. The exit tax will need to be implemeneted by 01 January 2020.
Finally, the Directive also proposes that Member States introduce a general anti avoidance rule which disregards any non-genuine arrangements which are carried out by a company for the purpose of gaining a tax advantage. Ireland in fact already has a similar General Anti-Avoidance Rule in our domestic tax law since the 1980s. The general anti-abuse rule in the Directive will need to be implemented by 01 January 2019.