Hybrid mismatch arrangements were introduced in 2020, with reverse hybrid arrangements following in 2022, through the implementation of Council Directive (EU) 2016/1164 of 12 July 2016—commonly known as the Anti-Tax Avoidance Directive (ATAD). This directive establishes rules to counter tax avoidance practices that undermine the proper functioning of the internal market. The hybrid mismatch provisions under ATAD align with the OECD's Base Erosion and Profit Shifting (BEPS) recommendations, specifically Action 2, which targets mismatches arising from differences in the tax treatment of financial instruments or entities.

One key measure includes the denial of deduction for the payer in cases where the corresponding income is not included in the recipient’s taxable income. Additional defensive rules are implemented under Article 67.m of the Slovenian Corporate Income Tax Act (ZDDPO-2), including:

- The inclusion of the deductible amount in the tax base of the recipient, where a deduction without inclusion arises and the deduction is allowed in the payer’s jurisdiction.
- Specifically, a Slovenian-resident taxpayer who is the recipient of a payment in such a hybrid mismatch arrangement is required to include the payment amount in taxable income, thereby neutralizing the mismatch.