ATAD 3: How will private equity measure up?
If adopted, the “Directive laying down rules to prevent the misuse of shell entities for tax purposes”, aka “ATAD 3” or the “Unshell Directive”, will deny the benefits of European directives and also the benefit of double tax treaties to EU-based holding companies which fail to meet minimum substance requirements from 2024. Per the draft directive, this applies not just to equity holding companies, but to holding companies for all forms of passive income including income from debt, IP and real estate.
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