contains five legally-binding anti-abuse measures, which all Member States should apply against common forms of aggressive tax planning; creates a minimum level of protection against corporate tax avoidance throughout the EU, while ensuring a fairer and more stable environment for businesses; the anti-avoidance measures in the Anti-Tax Avoidance Directive other than the rule on hybrid mismatches, are: (a) controlled foreign company (CFC) rule: to deter profit shifting to a low/no tax country, (b) switchover rule: to prevent double non-taxation of certain income, (c) exit taxation: to prevent companies from avoiding tax when re-locating assets, (d) interest limitation: to discourage artificial debt arrangements designed to minimise taxes, (e) general anti-abuse rule: to counteract aggressive tax planning when other rules don’t apply

establishes rules that seek to neutralise hybrid mismatches, in an effort to improve the resilience of the EU’s internal market as a whole by setting a minimum level of protection against mismatch outcomes; more extensive anti-hybrid rules in the ATAD 2 replace the initial rules to counter hybrid mismatch arrangements set out in the ATAD 1

targets the misuse of shell entities for tax purposes; introduces EU-wide minimum substance requirements; has wide ranging tax consequences for entities deemed to be “shells”, such as the loss of the benefit of double tax treaties and access to the EU Directives; allows Member States to tax shareholders on a look-through basis