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Articles | 2022-01-18

Tax Note | Proposal for a Tax Directive that establishes new rules to prevent the misuse of Shell Entities

On December 22, 2021, the European Union (EU) Commission released a new Proposal for a Directive - (in community jargon "Unshell Directive"), with the aim of discouraging the creation and abusive use of so-called "shell entities" or shell companies in obtaining tax advantages.

The Proposal applies to all entities (in the expression of the Proposal, “undertakings”) residents in the EU, which carry on an economic activity, regardless of their legal form, with the main practical effects being the possibility that such entities may be disregarded by the others. EU Member States as residents for the purposes of double taxation agreements and/or Mother-Daughter Directives (regarding the payment of dividends) and Interest & Royalties.
If the Proposal is approved, the provisions of the new Directive will have to be transposed and enter into force in the EU space from 1 January 2024.

TELLES Tax team has prepared an informative note, in which it analyzes in detail the main aspects of the Proposal.

Tax Note | Proposal for a Tax Directive Shell Entities

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