On 21 February 2017, the EU Finance Ministers agreed during a meeting of the ECOFIN(1) on a compromise proposal for an EU Directive amending Directive (EU) 2016/1164 (the socalled Anti-Tax-AvoidanceDirective, “ATAD”). While the ATAD already included measures dealing with hybrid mismatches in an EU context, ATAD 2 replaces these rules and extends their scope to transactions involving third countries. The EU Council is expected to adopt ATAD 2 once the European Parliament has given its opinion. This article outlines the hybrid mismatches targeted by the directive, the mechanisms that should avoid mismatch outcomes and the areas where ATAD 2 should have no impact.