ATAD3 'Unshell' Directive – European Commission proposes to neutralise the misuse of shell entities
ATAD3 ‘Unshell’ Directive – European Commission proposes to neutralise the misuse of shell entities
A proposal to prevent the misuse of shell entities for tax purposes was published by the European Commission late last year (the Directive). The proposal takes the form of an amendment to Council Directive 2016/1164/EU, the EU Anti-Tax Avoidance Directive (ATAD). The Directive has the potential to impact a wide variety of entities established in Ireland including holding companies, section 110 securitisation companies, fund vehicles, leasing entities and entities forming part of multinational groups which, if they do not satisfy certain substance requirements, will be subject to additional reporting requirements. Penalties for failure to comply range from denial of tax treaty benefits to being subject to penalties of at least 5% of annual turnover on a failure to report.