On the boundary between artificiality and reality : The General Anti-Tax Avoidance Rule in the Anti-Tax Avoidance Directive in light of the European Court´s Artificiality Test

Abstract: On 12 July 2016, the Council of the European Union adopted Directive 2016/1164 laying down rules against tax avoidance practices that directly affect the functioning of the internal market, often referred to as ATAD. Article 6 ATAD is a “general anti-avoidance rule” and stipulates that the EU Member States shall, for the purposes of calculating the corporate tax liability, ignore arrangements which have as the main purpose, or at least one of the main purposes, to obtain a tax advantage that defeats the objective or purpose of the applicable tax law, and are not genuine having regard to all relevant facts and circumstance. Since its introduction, the new general anti-avoidance rule in Article 6 ATAD has received considerable attention in academic discussion. It is safe to say that most commentators are critical of the rule and many argue that it will bring greater uncertainty to the application of taw law in EU´s Member States. The thesis analyzes how the case-law of the European Court of Justice on prohibition of abuse of law, and the academic literature thereon, can provide guidance on how Article 6 ATAD can be applied. By doing so the thesis casts light on some of the uncertainties that supposedly exist in regard to the rule and the criticism it has received.