The European Commission suggested a new approach to the proposed ‘UNSHELL’ Directive aimed at preventing the abuse of shell companies for tax purposes, at the high-level meeting on tax issues at the Council of the European Union on Tuesday 11 June.
For several months, negotiations on this text have stalled over the substance criteria (see EUROPE 13271/20). Based on Germany’s suggestion, this new proposal takes up the idea of sharing information on companies, their main characteristics (‘hallmarks’) and their potential risk.
“When there are plenty of alarm signals in the system, only then will the data exchange process be triggered”, explained a European source contacted by Agence Europe on Wednesday 12 June. “It would then be up to the Member State receiving the data to determine whether or not it was a shell company, and to act accordingly according to its own rules”, they continued.
The source pointed out that this proposal had received fairly broad support from the Member States. “However, not everyone is satisfied. Some people say they don’t really like it, but they don’t want to block it and they don’t want to prevent others from negotiating on it. But they are going to take part in the debate in a constructive way”, added the source.
In addition, some Member States and the Commission have pointed to the risks of administrative overload associated with this approach. There are still a lot of technical discussions to be held and a real proposal with amendments will have to be submitted.
This task will fall to the Hungarian Presidency of the Council, which begins on Monday 1 July. (Original version in French by Anne Damiani)