A Commission staff working document evaluating the Anti-Tax Avoidance Directive (ATAD), published by the Council on 25 June 2026, finds that while the directive has curbed tax avoidance, its minimum-standard design and optional provisions have created fragmentation, legal uncertainty, and high compliance costs for businesses and tax administrations across the EU.
The evaluation covers the implementation of ATAD (Directives 2016/1164 and 2017/952) from 1 January 2019 to mid-2025. The directive sets five minimum anti-abuse rules: Interest Limitation, Exit Taxation, General Anti-Abuse Rule (GAAR), Controlled Foreign Company (CFC) Rule, and Hybrid Mismatch Rules. One-off compliance costs across the EU are estimated at EUR 25–27 billion, with recurrent costs varying by taxpayer size and complexity.
The Interest Limitation Rule had the greatest impact but is considered insufficiently targeted and fragmented. The CFC Rule imposes significant administrative burden, and taxpayers found that the OECD's Pillar 2 rules made it redundant for groups in scope. Hybrid Mismatch Rules are rarely activated but effective when applied, though complexity—especially on imported mismatches—remains a key challenge. The GAAR is a necessary safety net but creates legal uncertainty due to vague scope and evolving CJEU jurisprudence. The Exit Taxation Rule had minimal effects on tax base protection, with the main challenge being valuation of intangible assets.
The document notes that ATAD's minimum-standard design and optional provisions have led to fragmentation and legal uncertainty, prompting consideration of legislative amendments or guidance to improve targeting and reduce burdens. No specific proposals are made in this evaluation, but it sets the stage for potential future action by the Commission and Council.