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23 December 2021 / news

European Commission publishes far-reaching legislative tax proposals

On 22 December 2021, the European Commission released several legislative proposals that will impact corporate taxpayers. The proposals build upon the international negotiations on the misuse of shell entities, Pillar Two, and reform plan of the Energy Taxation Directive.

The proposed Directive laying down rules to prevent the misuse of shell entities for tax purposes (“Shell Directive”) aims to avoid the misuse of “shell entities”, which are companies with no or very limited presence and economic activity. The proposed Directive on ensuring a global minimum level of taxation for multinational groups in the EU (“Pillar Two Implementation Directive”) relates to the implementation of most of the Pillar Two rules within the EU and follows the release of these rules by the OECD on 20 December 2021. Finally, proposals complementing the European Commission’s “Fit for 55” package were published concerning the new Carbon Border Adjustment Mechanism and the EU Emissions Trading System. These proposals should support green transition and contribute to the funding of the EU own resources.

These proposals will be tabled for discussion and, finally, adoption in the forthcoming 2022 meetings of the European Council on Economic Affairs. The aim of the European Commission is to have these proposals adopted in 2022 and in force per 2023 and per 2024 as far as the Shell Directive and part of the Pillar Two Implementation Directive are concerned.

Below we describe these proposals in more detail.

Shell Directive
Pillar Two Implementation Directive
EU own resources supporting the Fit for 55 package
Next steps/Final note


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