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Just as the dust has started to settle with the EU's first two Anti-Tax Avoidance Directives, the European Commission recently announced a third. ATAD III focuses on "shell" companies and puts monitoring and compliance costs on them as well as potentially imposing increased tax charges.

Given the wide usage of companies (such as SPVs) within fund structures, which may not have large headcounts or functions themselves, ATAD III and substance requirements need to be carefully mapped and navigated by fund managers to prevent unnecessary arduous compliance costs or tax leakage.

Rob Mellor and Dan Jones from PwC UK have provided an update to ATAD III on some encouraging news from the European Parliament's review of the draft Directive.