On 27 January 2015 the Council of the European Union (EU) amended the parent subsidiary directive to add a binding anti-abuse clause. This is designed to prevent tax avoidance and aggressive tax planning, and to ensure more consistency in the application of the parent subsidiary directive by member states. The anti abuse clause targets arrangements that have been put in place to obtain a tax advantage but do not correspond to the economic reality. Member states are free to apply more stringent anti-abuse rules provided that they are at least as strong as the anti-abuse clause added to the directive. Member states have until December 2015 to introduce an anti-abuse provision into their domestic legislation.

This illustrates the importance given to combating corporate tax avoidance by the EU and other international organizations. The OECD’s action plan on base erosion and profit shifting is supported by the G8 and G20 and the Council of the EU in December 2014 emphasized the urgent need to combat aggressive tax avoidance and tax evasion both within the EU and at the international level.