ATAD3 stands for “Anti-Tax Avoidance Directive 3,” which is a new tax legislation introduced by the European Union (EU). It is part of the ongoing efforts of the EU to prevent aggressive tax planning and tax avoidance by multinational companies operating in the EU.
ATAD3 builds upon the previous two anti-tax avoidance directives (ATAD and ATAD2) and aims to further strengthen the EU’s tax rules by introducing new measures to combat tax avoidance. The directive includes provisions related to hybrid mismatches, controlled foreign companies, and interest limitation rules.
The main goal of ATAD3 is to ensure that multinational companies operating in the EU pay their fair share of taxes and do not use complex tax structures to avoid taxation. The directive is part of a broader effort by the EU to create a fairer and more transparent tax system within the bloc.
It’s worth noting that ATAD3 is still relatively new and may continue to be refined and updated in the coming years as the EU works to strengthen its tax rules and combat tax avoidance.
