ATAD3: Minimum Substance Triggers Maximum Reporting

International Tax Team video series – EU update on proposed anti-tax avoidance rules to prevent misuse of shell entities

Michael Ayachi

Michael Ayachi

Seconded Partner, Head of Luxembourg Tax Center, KPMG US

+1 212-954-1254

Kees van Meel

Kees van Meel

Seconded Partner, Head of Netherlands Tax Center , KPMG US


The European Union’s draft Anti-Tax Avoidance Directive introduces rules to prevent the perceived misuse of shell entities—commonly referred to as ATAD3—by requiring minimum substance levels for operations located within the European Union. Its introduction may affect holding company structures.


October 18, 2022 | Watch this video on ATAD3 to understand why it is important to take action now while the provisions are not yet in force. The video, presented by Kees Van Meel and Michael Ayachi, KPMG Tax partners from KPMG in the Netherlands and KPMG in Luxembourg, respectively, and currently seconded to KPMG in the United States as part of the firm’s International Tax Team, provides an overview of ATAD3 and explores how to:

  • Determine whether an entity qualifies as a shell entity and thus needs to report on substance
  • Evaluate economic substance
  • Apply the Directive’s rebuttal rule or exemption due to absence of tax benefit
  • Understand the potential tax consequences for payer and shell entity
  • Report information needed.


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This 18-minute video was recorded on September 14, 2022.