ATAD 1 & 2 – Why Banks Need To Sit Up & Take Notice

Private equity players and alternative investors will likely be familiar with the acronym ATAD, but it might not be the case for those in Luxembourg's banking sector. It is time, however, for them to get to grips with these four letters which stand for Anti-Tax Avoidance Directive. Why? Well, despite these new tax measures focusing primarily on unregulated multinational enterprises, they could have a significant impact on more traditional investment industries.

What are ATAD 1 & ATAD 2?

ATAD arose from the OECD's ambitious Base Erosion and Profit Shifting (BEPS) project launched back in 2015.

It is designed to equip governments with the appropriate domestic and international instruments needed to ensure that tax is paid where income is generated and/or value is created, ultimately restoring trust in the fairness of tax systems.