A Commission staff working document evaluating the Anti-Tax Avoidance Directive (ATAD), published by the Council on 25 June 2026, concludes that the directive has been broadly effective in curbing tax avoidance but requires updates to align with new global tax rules. The evaluation covers ATAD implementation from 1 January 2019 to mid-2025, assessing its five core rules: Interest Limitation, Exit Taxation, Controlled Foreign Company (CFC), General Anti-Abuse Rule (GAAR), and Hybrid Mismatch rules. These rules set minimum EU standards against tax avoidance, with most applying from 2019, while Exit Taxation and Hybrid Mismatch rules took effect from 2020, and Reverse Hybrid Mismatches from 2022. Five Member States (Greece, France, Slovakia, Slovenia, Spain) received a derogation until 1 January 2024 for the Interest Limitation rule.
The evaluation, based on an external study, stakeholder feedback, and a Call for Evidence, examined effectiveness, efficiency, relevance, coherence, and EU added value. It found that ATAD has reduced tax avoidance and improved internal market functioning, but noted that the introduction of the Pillar 2 Directive (EU 2022/2523) on global minimum taxation affects ATAD's continued relevance. The Commission estimates that revenue lost from profit shifting within the EU was EUR 50-70 billion annually (based on 2013 data), underscoring the need for robust anti-avoidance measures.
Policy orientations and trade-offs The document recommends that the Commission assess ATAD's interaction with Pillar 2 and consider updates to keep rules fit for purpose. Potential updates could simplify compliance for businesses while maintaining anti-avoidance effectiveness. A key trade-off lies between reducing administrative burden on multinational enterprises and ensuring that tax avoidance loopholes are closed. The evaluation also highlights the need for coherence between ATAD and other EU tax initiatives, such as the Debt-Equity Bias Reduction Allowance (DEBRA) proposal.
Impact on stakeholders - EU multinational enterprises: May face additional compliance costs if ATAD rules are updated, but could benefit from simplification and alignment with global standards, reducing fragmentation across Member States. - National tax authorities: Would need to adapt enforcement practices to any new rules, but clearer EU-wide standards could improve cross-border cooperation and reduce tax avoidance. - EU taxpayers: Stand to benefit from reduced tax avoidance, potentially increasing tax revenues that fund public services, though the impact is indirect and long-term. - EU policymakers: Must balance the need for robust anti-avoidance measures with the goal of maintaining a competitive business environment, especially as global tax rules evolve.
Institutional follow-up The evaluation is a staff working document, not a legislative proposal. It serves as a basis for the Commission to decide on possible amendments to ATAD. Any legislative changes would require a proposal from the Commission, followed by negotiation between the Council and the European Parliament. The document also feeds into ongoing discussions on tax simplification and the EU's response to global tax reforms under the OECD/G20 Inclusive Framework.