During 2021 the European Commission consulted on the misuse of shell entities for tax avoidance or evasion purposes. On 6 April 2022 AREF’s Tax Committee provided feedback to the European Commission’s draft directive laying down rules to prevent the misuse of shell entities for tax purposes and amending Directive 2011/16/EU (Directive on Administrative Cooperation – DAC). More details can be found here.
While far from certain that Member States will consent to the Directive in its current form, as currently drafted it is likely to contribute to additional layers of reporting and compliance for many real estate fund structures which employ these types of shell entity.
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