The ATAD 2 Anti-Hybrid Rules versus EU Member State Tax Treaties with Third States: Is Override Possible?

This article analyses the anti-hybrid mismatch rules applicable in respect of third countries contained in the amended EU Anti-Avoidance Directive (2016/1164) (ATAD 2). The author concludes that, in general, the Council designed ATAD 2 so as to ensure that Member States could avoid possible treaty override and preserve their obligations with third countries although, in a limited number of scenarios, treaty override could still arise.