The Economic and Financial Affairs Council (ECOFIN) reached agreement on the draft EU anti-tax avoidance directive, following a silence procedure which ended on 20 June 2016.

The directive will be submitted to the Council for adoption after the text has been finalised in all official EU languages. The directive lays down common minimum rules on the areas of interest limitation, exit taxation, GAAR, controlled foreign companies and hybrid mismatches.

In a statement from the Department of Finance it was noted that the Minister for Finance, Michael Noonan sought to ensure that Ireland’s sovereignty on tax rates was fully protected and that anti-avoidance measures would not impact on genuine investment in Ireland.

The statement also noted that the Anti-Tax Avoidance Directive is being transposed with a timeline that allows business to plan ahead and which should ensure Europe acts consistently with the rest of the world:

• The bulk of the Anti-Tax Avoidance Directive must be transposed by the start of 2019;
• The exit tax must apply from 2020;
• The provisions on interest deductions are deferred until 2024 for countries, like Ireland, that already have strong targeted rules. There are also strong grandfathering provisions to provide certainty to investors.