The European Commission proposes that shell companies in the EU
that have no or minimal economic activity are unable to benefit
from tax treaties and EU Directives advantages.
Announced by the European Commission on May 18, 2021, a draft
Directive has been released on December 22, 2021, aiming at
neutralizing the misuse of shell entities (i.e., low substance
entities, entities existing only on papers) for improper tax
purposes within the EU.
The negotiation phase is now opened between the Member States.
The Directive's enactment requires in principle the unanimity
between all Member States. In the context of recent media
revelations and OCDE reforms, we believe such enactment should be
achieved. It seems that the draft Directive is being taken very
seriously by MNE which have already started to review their
situation within the EU.
