On 19 December 2019, the Luxembourg Parliament approved draft law implementing EU Anti-Tax Avoidance Directive (2017/952) (ATAD 2) into Luxembourg domestic law. ATAD 2 amends the EU Directive 2016/1164 which applies to mismatches between EU member states, to hybrid mismatches with non-EU countries, and brings additional types of hybrid mismatches within the scope of the measures.
ATAD 2 extends the scope of the Hybrid Mismatches Rules to a wider range of transactions and also to apply to transactions with non-EU countries. The law will be effective for tax years starting on or after 1 January 2020, except for the reverse hybrid rules which will apply only as of tax year 2022.