2026

Finland, Liechtenstein, and Poland are advancing the implementation of OECD pillar 2 rules, including safe harbor provisions and expanded information exchange requirements. Finland approved legislation incorporating OECD administrative guidance on GLOBE safe harbors, including the side-by-side safe harbor that could exempt U.S.-parented groups from top-up tax. Poland, meanwhile, enacted rules implementing DAC9 to facilitate the automatic exchange of pillar 2 information returns among EU tax authorities.

A senior European Commission tax official rejected concerns that implementing the OECD pillar 2 “side-by-side” package without amending the EU directive creates legal uncertainty or unfair advantages for the United States. The official argued that the directive already provides sufficient flexibility for member states to implement the safe harbor framework tied to jurisdictions with qualifying minimum tax regimes. The discussion reflects broader debates in Europe over pillar 2 implementation, administrative complexity, and coordination among member states on international tax rules such as transfer pricing.

The U.S. Senate advanced the bipartisan HONOR Act, which would deny foreign tax credits and income tax deductions for taxes paid to Russia by U.S. businesses. The proposal would add Russia to the list of countries subject to the section 901(j) foreign tax credit disallowance rules, alongside jurisdictions like Iran and North Korea. The measure reflects growing efforts to use the tax system as a geopolitical tool to discourage economic activity that could support adversarial governments.