United Kingdom is expected to leave the EU by the end of October – after the recent suspension of the UK parliament, the “no-deal” end seems to get more and more inevitable by the day. Yet, little is known about what will happen on 1st November- we will be publishing a series of articles every week and try to enlighten those which will affect UK businesses the most. Now let’s have a look the EU Anti-Tax Avoidance Directive which might end up having large effects on the biggest of the UK companies.
European Union Anti Tax Avoidance Directive Explained
EU bloc is increasingly worried about having a “tax-haven” at its doorstep. That is why, the European Parliament has discussed ways on how to prevent UK from turning into a refuge for those European companies who want to engage in tax avoidance and that the EU should continue to meet EU’s standards on tax avoidance prevention. The anti tax avoidance directive full report can be found on the EU website for those who wants to do further reading..
Is UK going to comply with he EU anti tax avoidance directive?
As most people would know, EU had a tough stance on multinational companies benefiting from tax loopholes. Until the Brexit, UK also followed a similar policy to prevent multinational companies from shifting income to other jurisdictions and having a negative impact Exchequer’s income.
HMRC published Controlled Foreign Companies and EU Anti-Tax Avoidance Directive on 7 November 2018. In summary this directive ensures that the HMRC will follow EU Anti-Tax Avoidance Directive in the post Brexit scenario.
HMRC’s policy objective is is to make sure the UK Controlled Foreign Company (CFC) rules continue to discourage potential tax planning by large multinational groups. The changes will comply with Council Directive (EU) 2016/1164, also known as the EU Anti-Tax Avoidance Directive (ATAD)
Who is affected by the Anti Tax Avoidance Directive ?
EU bloc is increasingly worried about having a “tax-haven” at its doorstep. The EU Anti Tax Avoidance package is quite comprehensive. That is why, the European Parliament has discussed ways on how to prevent UK from turning into a refuge for those European companies who want to engage in tax avoidance and that the EU should continue to meet EU’s standards on tax avoidance prevention.