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January 31, 2020
Gibraltar implements EU ATAD 2 on hybrid mismatch arrangements
HM Government of Gibraltar published legislation, on 30 January 2020, to implement Council Directive (EU) 2017/952 (ATAD 2), which amends Directive (EU) 2016/1164 (ATAD) regarding hybrid mismatches with third countries.
The legislation extends the territorial scope of the anti-hybrid mismatch provision to hybrid mismatches with jurisdictions outside the European Union (EU). It also includes rules for hybrid permanent establishment mismatches, hybrid transfers, imported mismatches and dual resident mismatches. The legislation does not include the Anti-Tax Avoidance Directive’s (ATAD 2) provisions on reverse hybrid entities, as ATAD 2 does not require this to be implemented until 1 January 2021.
The legislation does not go beyond the ATAD 2’s mandatory “minimum standards” to neutralize hybrid mismatches. Gibraltar also decided to opt in for all possible exceptions provided for by the ATAD 2.
The amendments made by the legislation apply in relation to accounting periods commencing on or after 1 January 2020.
For additional information with respect to this Alert, please contact the following:
EY Limited Gibraltar