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Austria, Ireland Have Failed To Adopt ATAD BEPS Measures

by Ulrika Lomas, Tax-News.com, Brussels

06 December 2019


The European Commission has requested that both Austria and Ireland take action to transpose EU-wide interest limitation rules into their respective national laws.

Transposition of the interest limitation rule is required as part of the EU's Anti-Tax Avoidance Directive (ATAD). The ATAD requires member states to introduce an interest limitation ratio, designed to limit the ability of groups to deduct substantial borrowing costs when calculating taxable profits.

Both Austria and Ireland have said that they already had in place "equally effective" interest limitation rules, and requested derogation from EU rules that would enable them to postpone transposition until January 2024.

In July 2018, the Commission informed Austria and Ireland that it does not consider their national rules to be "equally effective" to the interest limitation rule set out in EU law and that postponing the transposition date is not justified. Neither the Austrian nor the Irish measure were included on the list of national interest limitation rules which the Commission considers "equally effective."

If Austria and Ireland do not act within the next two months, the Commission may decide to bring the cases before the European Court of Justice.

TAGS: compliance | tax | European Commission | tax compliance | Ireland | tax avoidance | interest | law | transfer pricing | Austria | tax reform | European Union (EU) | Europe | BEPS

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