2026

U.N. Issues Latest Draft of Tax Cooperation Framework Convention

The U.N. released an updated draft framework convention on international tax cooperation that would set principles for sustainable development, fair allocation of taxing rights, measures targeting high-net-worth individual avoidance/evasion, harmful tax practices, and expanded mutual administrative assistance and exchange of information, with protocols contemplated to implement specific rules.

To read the full document, click here

U.K. Confirms Huge Rise in Economic Crime Levy for Largest Firms

HMRC has announced significant increases to the UK economic crime levy effective April 1, with the largest anti-money laundering (AML) regulated firms experiencing the most substantial increases. The revised structure introduces a new band for firms with UK revenue between £500 million and £1 billion, setting their annual levy at £500,000, and doubles the charge for firms with revenue exceeding £1 billion to £1 million. These adjustments enhance the levy’s capacity to fund anti-money laundering initiatives, but have also renewed concerns within the legal sector regarding broad revenue bands that apply identical charges to firms of varying sizes.

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Pillar 2 as a New International Fiscal Law

Li argues that pillar 2 is more than a coordinated minimum tax and effectively functions as a new international fiscal law regime that constrains states’ fiscal policy choices, especially around tax incentives and effective rates. The IIR and the UTPR, as mechanisms that indirectly pressure source states to adopt qualified DMTTs or redesign incentives, meaning that what is really being “taxed” is other states’ forgone revenue. Pillar 2 operates as a common approach enforced through interlocking domestic laws and OECD guidance, creating a de facto supranational legal order without a formal treaty instrument. Side-by-side arrangements and expanding safe harbors may narrow pillar 2’s reach and reshape the durability of this networked sovereignty model.

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HMRC Outlines Legislative Changes to Pillar 2 Top-Up Taxes

HMRC released a policy paper detailing legislative amendments to the U.K.’s Pillar Two Multinational Top-up Tax and Domestic Top-up Tax to align with OECD January 2025 administrative guidance and to fix issues relating to pre-regime deferred tax assets, cross-border allocation of deferred taxes, and a domestic top-up tax exclusion for REIT profits/losses.

To read the document, it be can be read here

Compliance Burden to Stay High Under Global Minimum Tax Deal

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Simplification measures in the OECD’s new global minimum tax rules are unlikely to reduce the compliance burden for companies as they determine their tax liabilities under the new system, tax professionals said.

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Multinationals Seek Safe Harbors, Tax Clarity for Remote Work

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Multinationals asked the OECD for more clarity on complex questions around how corporations should be taxed in relation to remote work and a safe harbor for short-term cross-border working.

Here is the OECD consultation document on remote work, along with comments on it.

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Venezuela, Greenland, and the Side-by-Side Package

Herzfeld contrasts early 2026 geopolitical shock tactics with the unusually cooperative breakthrough on the OECD Inclusive Framework on BEPS side-by-side package for pillar 2, framing international tax as a way of multilateralism. Herzfeld explains that the package is not just “GILTI equivalence” optics, as it prioritizes simplification safe harbors, extends the CbCR safe harbor, and then creates an elective side-by-side safe harbor that effectively shields U.S. groups from the IIR and UTPR. But the U.S. sovereignty is partly “priced” through ongoing review and continued QDMTT-driven compliance and calculation burdens, and smaller economies may face tighter constraints on the incentives they relied on to attract investment. Herzfeld questions why it took years and near retaliation to reach a workable accommodation and warns that the deal’s durability depends on politics, administrative complexity, and how the monitoring regime evolves.

Link: To read the full article, click here (subscription required).

Europe’s Own Trade Barriers Are Worse Than Trump’s, ECB Finds

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Trade frictions across the European Union are more onerous than the highest tariff US President Donald Trump threatened to slap on the bloc last year, according to research by the European Central Bank.

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OECD Pressed for More Guidance on Permanent Establishment Rules

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Companies need additional guidance on the impacts of remote work on corporate taxes and the creation of taxable permanent establishments, practitioners told the OECD in comments as part of the group’s global workforce mobility project.

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OECD Makes Case for Developing Countries to Adopt Minimum Tax

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Developing countries will want to adopt the global minimum tax because they will collect revenue, and further work is being done to make the levy more administrable, a top OECD official said.

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