European Commission fights against misuse of shell entities

Wednesday 12 January 2022 14:38 CET | News

The European Commission has presented a new initiative to fight fake shell entities for improper tax purposes.

The Unshell proposal aims to ensure that entities registered in the European Union with no or minimal economic activity won’t be able to claim tax advantages and, therefore, won’t become a financial burden on taxpayers. The initiative also protects the playing field for most European businesses, which represent a key factor on Europe’s path to economic recovery. 

The new measures will create transparency standards around the use of shell entities so that they can be easily detected by tax authorities. By introducing a filtering system for economic entities, the latter will have to comply with various indicators which will become a type of gateway. 

The first indicators will monitor the entity’s activity based on the received income, while the second gateway implies a cross-border element. Finally, the third indicators will look at whether corporate management and administration services are outsourced or handled in-house.

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Keywords: European Commission, regulation, transaction monitoring, Open Data Economy, tax evasion , cross-border ecommerce, cross-border payments
Categories: Payments & Commerce
Companies: European Commission
Countries: Europe
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