2026

Barnes and Rosenbloom explain the nexus between digital services taxes and consumption taxes, urging tax professionals to take a more constructive approach in applying consumption taxes to digital services.

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The European Commission (EC) Aug. 28 posted online State Aid Case Decision No. SA. 122392, approving amendments to Ireland’s digital games tax credit regime. The decision includes measures to: 1) extend eligible expenditure to post-release digital content developed within three years of game’s initial release; 2) require the original game to have qualified for the credit and have been publicly released, and post-release content to maintain cultural themes and meet certification requirements; 3) maintain the 32 percent credit on the lowest of eligible expenditure, 80 percent of qualifying expenditure, or 25 million euros (US$29.1 million) per project; 4) increase the estimated annual budget to 13.8 million euros (US$16 million) for 2027-2031, with a total budget of 78.9 million euros (US$91.5 million); and 5) apply the amendments through Dec. 31, 2031. The EC found the regime compatible with the internal market under the Treaty on the Functioning of the European Union (TFEU). [European Union, European Commission, 08/28/26].

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The European Commission defended its proposals to exempt large multinational groups from parts of the EU’s tax avoidance rules, arguing to skeptical EU countries that the requirements duplicate the bloc’s global minimum tax regime and can lead to double taxation.

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A senior EU official promised to defend the European Commission’s proposal to end withholding taxes on intra-EU transactions despite opposition from some of the bloc’s countries.

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Major economies and key negotiators of a United Nations global tax agreement want significant changes to the deal’s latest drafts, including more flexibility for signatories, more precise rules and clearer boundaries with existing treaties.

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Minjbadam proposes a consumption or sin tax on social media user time to help taxpayers disengage from those platforms.

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The OECD on September 11 published a guiding standard template for the global anti-base-erosion information return based on the latest updates agreed by the inclusive framework on base erosion and profit shifting, with the goal of allowing tax administrations to efficiently conduct the appropriate risk assessments and liability evaluations under the GLOBE rules.

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Feedback on the draft U.N. protocol for taxing cross-border services income reveals a sharp divide between developing nations and the business community over treaty modification and gross-basis taxation. In August 26 comments, the South Centre urged the adoption of a multilateral fast-track instrument to swiftly override existing bilateral treaties, while the National Foreign Trade Council warned that gross-basis withholding without physical presence nexus threatens double taxation and disrupts settled treaty networks.

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The Milan First-Instance Tax Court ruled in Judgment No. 292/2026 that Italy’s 3 percent digital services tax does not apply to direct consignment sales where an e-commerce platform acts as a buy-sell retailer rather than an intermediary facilitating user interaction, ordering a €1.04 million refund to an unnamed fashion retailer. Marking the country's first judicial decision on the DST's e-commerce scope, the court held that because customers dealt exclusively with the platform and bore no multilateral interaction with suppliers, the statutory prerequisite of user-to-user networking was absent.

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The International Centre for Tax and Development submitted comments regarding the U.N.'s draft protocol on the taxation of cross-border services income, recommending that the protocol include an anti-treaty-shopping rule; a definition for consumer and one for services; a revamped profit calculation method for multinational enterprise groups; more explicit allocation of taxing rights in the nexus rules; and the consideration of more generously calculated foreign tax credits.

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