On April 5, 2022, KPMG1 member firms in the EU submitted a response to the European Commission’s (EC’s) public consultation on the proposed EU Directive on rules to prevent the misuse of shell entities for tax purposes. This follows the submission of a KPMG response to the initial public consultation held on the proposal in August 2021.
While KPMG believes that the potential misuse of entities lacking economic substance for tax purposes should be given further consideration, we are of the view that the need for EU-wide action should be assessed in the context of the current tax landscape, i.e. following the entry into force and impact of rules such as the EU Anti-Tax Avoidance Directive (ATAD) and the EU Mandatory Disclosure Rules for Intermediaries and Taxpayers (MDR / DAC6), as well as in light of further expect changes, such as the entry into force of the OECD Global Anti-Base Erosion (GloBE) Model Rules.