On 20 June 2025, the EU Council approved an ECOFIN report confirming that work on the proposed Unshell Directive - originally aimed at curbing the misuse of shell entities for tax purposes - will be abandoned.
This decision follows concerns about overlaps with existing rules under DAC6, which could result in duplicative reporting and increased administrative burdens. In line with the EU’s broader tax simplification agenda, Member States agreed that the Unshell Directive’s objectives could be more effectively achieved through potential targeted amendments to DAC6.
This move is welcome as it aligns with the principles of regulatory efficiency and competitiveness, and reflects a shift in the EU’s focus toward streamlining existing frameworks.
In this article, our Tax Partner, Hugues Henaff, and our Chief Knowledge Officer, Marie Bentley, explain this decision and its consequences.