2026

At a September 7 European Parliament FISC subcommittee hearing, former OECD tax chief and Bruegel fellow Pascal Saint-Amans cautioned that while EU anti-tax-avoidance rules need decluttering, the bloc must avoid swinging from hyper-regulation to backdoor tax cuts. Pointing to overbroad relief under the proposed Tax Simplification Omnibus—such as exempting "SMEs" with turnovers up to €400 million from CFC rules and repealing imported hybrid mismatch provisions—Saint-Amans warned that the EU risks severe revenue erosion, particularly if it ratifies the OECD side-by-side agreement while member states like Malta opt out of domestic top-up taxes, leaving room for U.S. multinationals to escape taxation.

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In a September 4 letter to the European Commission, Spain proposed introducing a European climate resilience levy on oil and gas profits as a new EU own resource for the 2028–2034 multiannual financial framework, seeking dedicated funding to anticipate and absorb mounting climate shocks. Backed by Executive Vice President Teresa Ribera and coordinated alongside calls from six member states to establish an EU-wide windfall tax framework, Madrid's initiative lands amid contentious budget negotiations—where the Carbon Border Adjustment Mechanism and an e-waste levy currently command broader consensus than corporate turnover, gambling, or digital levies, while a fiscally conservative bloc of six nations pushes for multi-billion-euro spending cuts.

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The OECD’s pending new rules to shore up leaks in the global minimum tax are sparking concerns among tax pros about yet another layer of complexity to an already-complicated framework.

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During a September 3 working meeting on the Tax Simplification Omnibus, EU member states strongly questioned proposed amendments to the Anti-Tax Avoidance Directive’s interest limitation rule, challenging a nonderogation clause that would bar countries from retaining more restrictive domestic caps below the harmonized 30 percent EBITDA ceiling or €3 million threshold. Citing fiscal erosion and legal redundancy under TFEU Article 288, delegates also scrutinized mandatory exclusions for third-party debt and automatic inflation indexation, while the European Commission confirmed that proposed updates to the ATAD general antiabuse rule are intended to encompass Pillar 2 top-up and withholding taxes without adopting an exhaustive list.

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The OECD on September 8 published its report on tax policy reforms and trends during the 2025 calendar year across 92 partner jurisdictions, finding that many countries had implemented progressive personal income tax measures for raising revenue while also working to support low- and middle-income households; that VAT changes primarily revolved around digitalization reforms; that property taxation remained one of the less frequent tax reforms but that many countries targeted revenue mobilization through recurrent immovable property taxes; and that health.

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France saw a significant decline in unresolved international double-taxation dispute cases in 2025, according to official statistics.

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The New Zealand Inland Revenue Sept. 2 opened a consultation on Exposure Draft No. PUB00266, to replace Interpretation Guideline No. IG0007 on the income taxation of payments to nonresident software suppliers. Topics covered include: 1) the exclusion from nonresident contractors’ withholding tax (NRCT) for the provision of Software as a Service (SaaS), Platform as a Service (PaaS), and Infrastructure as a Service (IaaS), but not insofar as the service involves personnel located in New Zealand who aren’t excluded under a DTA and the 92-day rule concerning schedular payments; 2) expanded discussion of market intermediaries, which includes their general role as resellers in cloud computing transactions; 3) the expanded classification of software transactions to include supplies of cloud computing services, including the SaaS, PaaS, and IaaS service models; and 4) expansion of the development or modification services classification to include additional services arising in cloud computing. Comments are due Oct. 31. [New Zealand, Inland Revenue, 09/02/26].

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Hong Kong and Slovenia signed a comprehensive agreement for the avoidance of double taxation, bringing Hong Kong’s treaty network to 60 agreements. The CDTA allocates taxing rights between the two jurisdictions and provides foreign tax credit relief for Hong Kong residents taxed in Slovenia. It also reduces Slovenia’s withholding tax on dividends paid to Hong Kong residents to a maximum of 10 percent and on interest and royalties to 5 percent, subject to the agreement entering into force after both sides complete their ratification procedures.

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The European Commission insisted in written feedback to member states that a strict safeguard must accompany the proposed ATAD Controlled Foreign Company (CFC) carveout under the Tax Simplification Omnibus to prevent jurisdictions from backsliding on Qualified Domestic Minimum Top-Up Tax (QDMTT) commitments. Defending the condition against pushback from U.S. multinationals under the OECD side-by-side framework, the Commission clarified that EU intermediate holding companies of U.S. groups will be denied the CFC exemption unless their low-taxed foreign subsidiaries are subject to an uncompromised QDMTT free of offsetting financial benefits, ensuring low-taxed profits do not escape both regimes.

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At least 18 jurisdictions—predominantly European nations alongside states such as Singapore and Switzerland—are urging the United Nations to incorporate optionality and reservation mechanisms into the draft protocol on taxing cross-border services income. Submitting feedback following August intergovernmental negotiations, dissenting governments warned that the text’s strict prohibition on reservations, combined with mandatory gross-basis withholding and unresolved nexus rules, creates severe bilateral treaty conflicts and legal uncertainty that could preclude broader participation.

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