In the fight against tax evasion, a global problem requiring global solutions, the European Union is responding in connection with its base erosion and profit shifting (BEPS) project with a package of measures to which the Ministry of Finance has already expressed its agreement.
In early 2016, the EU introduced the Anti Tax Avoidance Package (ATAP), consisting of four partsand whose main aim is to limit tax evasion at the international level. These are the following:
1) Anti Tax Avoidance Directive (ATAD)
2) Recommendation on Tax Treaties
3) Revised Administrative Cooperation Directive
4) Communication on External Strategy.
Planned measures in different parts of the ATAD include the interest limitation rule, similar and yet more stringent than the thin capitalisation rule provided in Slovakia, and also the general anti-abuse rule, exit taxation and controlled foreign companies rules. Recommendation on how to prevent the abuse of taxation treaties are also an important point in the struggle against tax evasion. These stricter changes do not sidestep the required automatic exchange of tax information. Multinational companies with consolidated turnover of more than €750 million will be required to disclose information on accrued and paid income tax, number of employees, net turnover and before tax profit. The public will have access to the information in the Business Register and on the company’s website for five years. Communication of an external strategy aims to enhance transparency, establish standards of good governance in tax matters and ensure fair competition. Implementation of these proposed changes is scheduled for 2017 or possibly 2018.
