CYIL vol. 15 (2024)

EDITA FILADELFIOVÁ CYIL 15 ȍ2024Ȏ proposal. 42 There are noticeable differences between the CARF project within BEPS 43 and the EU directive, but it is clear that this will be the biggest success in the field of cryptocurrencies in EU law so far. 2.2.2 Implemented Neutralization, the effects of hybrid schemes Another measure of the OECD that we can see implemented in the EU’s secondary legislation is the neutralization of hybrid mismatches. 44 Once again, in the form of a directive, 45 the Council of the EU adopted an amending proposal that addresses hybrid mismatches with third countries. The directive, as stated, was adopted in direct response to BEPS Action 2. 46 The OECD defines hybrid mismatches as arrangements that exploit differences in the tax treatment of entities, instruments, or transfers between two or more countries. 47 In such cases, it can happen that income ultimately does not fall under any jurisdiction for taxation. Some authors remain critical of the directive, as they believe that the directive’s goal reflects the standards of BEPS Action 2 only to a limited extent, 48 a point not contradicted by the Commission itself: “ The ATAD provides for measures in five distinct areas, which Members States are required to implement: interest limitation rule, exit taxation, controlled foreign company rule (CFC), hybrid mismatches rule and general anti-abuse rule (GAAR) ” 49 However, we will focus on the areas where the impact of BEPS on the directive is most evident. Firstly, this directive expands the scope of the original directive 50 to include hybrid mismatches with third countries, not just within EU countries. The aim was to ensure consistency in the application of anti-tax avoidance measures and to prevent the shifting of profits out of EU countries through these hybrid arrangements. 51 The specific rules arising from the directive are not yet entirely clear and are being supplemented by emerging case 42 COMMISION OF THE EU, 2024. Questions and Answers: DAC8. (cit. 2024-02-03). Available online: https:// ec.europa.eu/commission/presscorner/detail/pt/qanda_22_7517. 43 BOB, M., 2023. Everybody’s Got Something to Hide except Me and My NFT Monkey: Analysis of the European Commission’s DAC8 Proposal on Automatic Exchange of Crypto-Asset Information . p s. Available online: https:// ssrn.com/abstract=4323158. 44 OECD, 2017. Neutralising the Effects of Branch Mismatch Arrangements, Action 2: Inclusive Framework on BEPS , OECD/G20 Base Erosion and Profit Shifting Project. Paris: OECD Publishing, 2017. (2024-03-02). Available online: https://doi.org/10.1787/9789264278790-en. 45 Council Directive (EU) 2017/952 of 29 May 2017 amending Directive (EU) 2016/1164 as regards hybrid mismatches with third countries. 46 Ibis, par. 5. 47 OECD, 2012. Hybrid Mismatch Arrangements: Tax Policy and Compliance Issues . p. 7 (cit. 2024-02-03). Available online: https://www.oecd.org/ctp/aggressive/hybrid-mismatch-arrangements-tax-policy-and-compliance-issues.pdf. 48 ARGINELLI, P. 2022. Critical Review of the Atad Implementation: The Implementation of the ATAD in Italy. In: 50, Intertax, n. 6, 2022, pp. 531–542 Available online: https://kluwerlawonline.com/journalarticle/ Intertax/50.6/TAXI2022050. 49 Final Report From The Commission to the European parliament and the Council on the implementation of Council Directive (EU) 2016/1164 of 12 July 2016 laying down rules against tax avoidance practices that directly affect the functioning of the internal market as amended by Council Directive (EU) 2017/952 of 29 May 2017 amending Directive (EU) 2016/1164 as regards hybrid mismatches with third countries: COM(2020) 383. 50 Council Directive (EU) 2016/1164 of 12 July 2016 laying down rules against tax avoidance practices that directly affect the functioning of the internal market. 51 Point 8 of the Council Directive (EU) 2017/952 of 29 May 2017 amending Directive (EU) 2016/1164 as regards hybrid mismatches with third countries.

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