The international tax-planning structures that worked comfortably five years ago are not the structures that survive comfortably today. The substance bar has moved — in the EU through ATAD and DAC6, in the GCC through new economic-substance regulations, in OECD-aligned jurisdictions through Pillar Two — and structures designed for the earlier regime are now in active scrutiny.
The first thing tightening is genuine operational substance. A holding company in a low-tax jurisdiction with no employees, no office, no decisions actually being made on the ground, is increasingly indefensible regardless of how the residency certificate reads. Substance now means real people doing real work in the jurisdiction — and the audit trail to prove it. Structures that fail this test are being unwound, often expensively.
The second thing tightening is beneficial ownership transparency. Multiple jurisdictions now require beneficial ownership disclosure to the regulator, and several share this information cross-border under treaty arrangements. Structures whose advantage relied on the difficulty of tracing ownership are losing that advantage. The work now is to make sure the disclosed structure is genuinely defensible, not to obscure it.
The third thing tightening is treaty-shopping. Treaty networks were originally designed assuming a degree of genuine economic activity in the treaty jurisdictions; structures that use treaty residency without underlying activity are now being challenged under the principal-purpose test and limitation-on-benefits provisions that most modern treaties contain.
What survives is structures that were built for substance from day one — multiple operating jurisdictions with genuine activity in each, beneficial ownership documented transparently, treaty positions backed by real economic presence. Kaelo Advisory’s international tax planning works to this standard. We do not promise rates; we promise structures that are defensible in the jurisdictions they touch, today and in the next regulatory cycle. The full regulatory position is documented on Regulatory Disclosures.