Debate: Need to adopt the “Unshell” Directive on rules to prevent the misuse of shell entities for tax purposes
Date: WEDNESDAY, 12 JULY 2023
Speaker: Paolo Gentiloni
Language: EN

Let me recall that the Commission adopted this proposal in December 2021. We had hoped Member States could reach an agreement and finalise this proposal in a shorter time framework. The proposal itself envisages that national rules transposing the directive would enter into force in 2024. But, regrettably, this has not been the case. Despite the Swedish Presidency’s efforts to move the file forward, discussions in the Council are still ongoing.  It is true that ‘unshell’ is an ambitious initiative and technically complex. Setting out, as a common approach across the EU, a check-the-box test to determine substantial presence of legal entities for tax purposes is not an easy task.  However, this proposal is much needed, and it is important to find an ambitious agreement, even more so in a context in which fairness in the area of taxation is perceived as a priority by many citizens. We discussed this also in another point this afternoon. The citizens expect determination and swift action from the European institutions. It is our collective responsibility to live up to these expectations. In other words, an ambition which is not linked to timely delivery increases frustration and remains unfulfilled.  We all need to do our part to overcome divergences and show concrete unity on this matter. We need the ‘unshell’ directive and we need it soon. I am sure you share with me this sense of urgency, and this is the reason why we are here today. This is the reason why we will remain engaged and determined together on this issue as on other ones. In this respect, we very much welcome the Spanish Presidency’s intention that you reiterated, State Secretary, to expedite files in the field of corporate taxation with a view to combating tax evasion and avoidance, as indicated in the Presidency’s programme. Let me stress here how relevant this is for our collective work.  Last week we had the first meeting under the Spanish Presidency and I understand that there has been good discussion in that occasion. I hope we can rapidly build on that, as the State Secretary said. We will continue to work with the Spanish Presidency and all Member States to clarify the text and ensure that the administrative burden is appropriate, since this seems to be a concern. I am positive on the possibility to overcome all doubts and move forward. On our side, we remain at the full disposal of the Presidency to provide assistance and help finalise the directive.  Let me also take this opportunity to thank the European Parliament for your continued support on ‘unshell’ and for your clear position on the proposal. This opinion was adopted with an overwhelming majority of 637 votes in favour and only two against. The political support of the Parliament was and remains crucial, as I also said in the January plenary debate on ‘unshell’.  I share the key points made by the European Parliament in its opinion, and the Commission can accept many of these. And let me thank also rapporteur. I would also like to thank the European Parliament for the initiative of this debate aimed at supporting the adoption of our proposal. It is a very important contribution to raise awareness, and I think the Spanish Presidency commitment is very important. In conclusion, we must not lose sight of the bigger picture. We are waging a fight against tax abuse to address some of the intolerable disparities and distortions in our economic system. Concluding an agreement on the ‘unshell’ proposal is an essential element of this broader effort. It is a step in the right direction, and we should not hesitate any longer to take it.