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ARTICLE · 11 JANUARY 2022

Unshell Directive Proposal: How To Navigate New Substance Requirements

Goodwin Procter LLP
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On 22 December 2021, the European Commission presented a proposal for a new directive to fight against the misuses of shell entities for improper tax purposes.

European UnionTax
Bastien Voisin
Bastien Voisin
Yann Ricard
Yann Ricard

On 22 December 2021, the European Commission presented a proposal for a new directive to fight against the misuses of shell entities for improper tax purposes. This proposal has been issued to ensure that entities in the European Union that have minimal or no economic activity are unable to benefit from any tax advantages and do not place any financial burden on taxpayers.

The proposed measure can be divided into three prongs: 1) the reporting of information on the substance of some entities to their local tax authorities; 2) the minimum substance to have access to tax benefits under tax treaties; 3) the automatic reporting between the tax authorities of the EU Member States of the information disclosed for the purposes of the first two prongs.

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