Legal Analysis of GAAR under ATAD: Are SEE non-EU States Outpacing the EU?

The long-standing battle in securing tax revenues in the European Union has led to the adoption of the Anti-Tax Avoidance Directive (ATAD) as a key tool to combat tax avoidance. The measures aimed to restrict the abuse of tax laws by including both Specific AntiAbuse Rules (SAARs) and General Anti-Abuse Rule (GAAR). This article explains GAAR under ATAD and examines its implementation challenges in Southeastern Europe (SEE), assessing compliance levels across EU members and EU candidate countries. We employ an in-depth legal analysis of corporate tax laws and procedural tax rules to assess the level of conformity. It varies from full compliance to partial implementation of substance-over-form rules to no GAAR at all. Despite economic and institutional capacity limitations, some of SEE non-EU countries demonstrate a more ambitious trajectory in legal formalization of GAAR, at time matching or even surpassing certain EU member countries in the implementation of the key provisions. However, this ambition remains at odds with their enforcement capacities. Cross country comparison and evaluation based on scores for selected GAAR criteria suggest that EU membership does offer a seat at the table, but it does not guarantee robust compliance with GAAR requirements.