Having made an in-depth analysis the author of the article draws the following conclusions: wording of the Article 15 of the Directive – namely the definition of tax avoidance and valid commercial reasons, burden of proof – is unclear. The Court of Justice of the European Union does not provide much definition either. According to the Court of Justice, Article 15 of the Directive is a reflection of a general principle which states that abuse of rights is prohibited. Direct transposition of the said article into national legislation is not necessary – a general anti-avoidance rule established in the national legislation may suffice. In the case of tax avoidance in international mergers and transfers a substance over form principle could be applied in Lithuania. In the cases of tax avoidance mergers and transfers are used as a part of group of operations. In order to identify an aim to avoid tax, the whole group of operations and actual circumstances should be analysed. Substance over form principle can only be applied in the cases when there is a subjective intention to gain tax advantage as well as objective circumstances demonstrating that the purpose of the Directive was not achieved.