Critical Review Of The Atad Implementation: The Implementation of the ATAD in Italy

Abstract

The objective of the present contribution is to pinpoint the specificities of the Anti-Tax Avoidance Directive (ATAD) implementation rules in Italy, with a particular regard to the exercise of the different options provided by the Directive. That implementation has mainly taken the form of amendments to existing provisions (re Controlled foreign company (CFC), exit tax, interest deduction) with only a completely new set of rules (hybrid mismatch arrangements). For the general anti-abuse rule, the choice made has been to regard that rule as substantially overlapping with the Italian general anti-abuse rule (GAAR) and, therefore, not requiring any specific implementation. The result of this approach has been that taxpayers, tax authorities, and courts have been sledging comfortably into the new regimes without any significant discontinuity with the past, except for the hybrid mismatch regulation. In addition, the way in which Italy implemented the ATAD has proved rather conservative and appears largely compliant with the Directive. That notwithstanding, the most relevant departures from the ATAD are highlighted and discussed with a view to establish their compatibility with the EU legal order. Finally, the contribution examines the possible consequences stemming from the technique adopted to implement the Directive general anti-abuse rule and scrutinises the areas where tax litigations could more easily occur in the future. ATAD, CFC, hybrid mismatch arrangements, interest limitation rule, exit tax, CJEU, GAAR, abuse of tax law, EU law, Italy