New EU rules have been created to eliminate the main loopholes
used in corporate tax avoidance, entered into force on 1 January
2019. The rules are built on global standards developed by the OECD
in 2015 on Base Erosion and Profit Shifting (BEPS).
According to the new directive, all Member States must apply new
legally binding anti-abuse measures that target the main forms of
tax avoidance used by large multinationals, and with the support of
the new rules, Member States will be able to tackle tax avoidance
schemes in cases where other anti-avoidance provisions cannot be
applied. All Member States may tax profits moved to low-tax
countries where the company does not have any genuine economic
activity. Furthermore, the amount of net interest expenses that a
company can deduct from its taxable income will be limited.
