The preamble to the European Commission’s Unshell Directive includes four example scenarios setting out the tax consequences for structures that include an EU shell caught by the rules. Examining these reveals how the Unshell Directive could in practice result in layers of double taxation in previously tax efficient structures. While this may deter international groups from using EU companies as intermediate holding companies and encourage existing structures to be reorganised, the effectiveness of the Unshell Directive may be in doubt, particularly where third countries are involved.
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The preamble to the European Commission’s Unshell Directive includes four example scenarios setting out the tax consequences for structures that include an EU shell caught by the rules. Examining these reveals how the Unshell Directive could in practice result in layers of double taxation in previously tax efficient structures. While this may deter international groups from using EU companies as intermediate holding companies and encourage existing structures to be reorganised, the effectiveness of the Unshell Directive may be in doubt, particularly where third countries are involved.
If you or your firm subscribes to Taxjournal.com, please click the login box below:
If you do not subscribe but are a registered user, please enter your details in the following boxes:
