2026

German Finance Minister Lars Klingbeil called on the European Commission to present proposals by October for a windfall tax on oil companies benefiting from higher fuel prices.

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Artificial intelligence tax policy is likely to develop at a quicker pace than other policy areas amid public concern about the technology’s effect on labor and wealth, a top OpenAI tax official said Friday.

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The European Commission defended its plans to streamline the EU’s tax code that could cost member state governments about €3 billion ($3.4 billion) in annual corporate tax revenue as necessary to remove barriers to cross-border investment.

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Comments compiled from 18 EU member states reveal sharp divisions over the European Commission’s proposed Anti-Tax Avoidance Directive (ATAD) amendments in the Tax Simplification Omnibus, which would carve out Pillar 2 multinationals from controlled foreign corporation (CFC) rules unless parented in a side-by-side safe harbor jurisdiction without a non-refunded QDMTT. While delegations including Luxembourg, Croatia, and Romania welcomed the carveout as a pragmatic move to eliminate regulatory overlap, Italy, Poland, and Portugal warned that an outright exemption creates aggressive avoidance loopholes, advocating instead for crediting QDMTT payments against CFC liability. Concerns were further compounded by warnings from Croatia and Portugal against exempting SMEs based purely on size, questions from Austria and the U.S. Council for International Business regarding potential discrimination against U.S.-parented groups under the side-by-side framework, and calls for clarity on how expanding the ATAD general antiabuse rule to cover Pillar 2 liabilities interacts with ongoing OECD integrity talks.

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In his 2026 policy address to the Legislative Council, Hong Kong Chief Executive John Lee announced that the government will introduce legislation later this year to slash corporate profits tax to a concessionary 5 percent for qualifying enterprises in finance, advanced manufacturing, innovation and technology, research and development, and regional headquarters. Alongside plans to halve the corporate tax rate to 8.25 percent for physical commodity and gold traders to accelerate Hong Kong's commodities hub ambitions, Lee also rolled out targeted family relief—raising the child tax allowance to HKD 160,000 for second and subsequent children while granting a HKD 20,000 stamp duty waiver on home purchases for families with newborns.

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Since the resolution initiating negotiations on the UN Framework Convention on International Tax Cooperation (the Convention) was approved in December 2024, the recurring question has been: What impact will this framework have on how businesses operating across borders are taxed?

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In a Q&A prepared for the September 17 meeting of the EU Council’s working party on tax questions, the European Commission defended a controversial provision in the draft Directive on Administrative Cooperation (DAC) recast requiring member states to share complete, unredacted Country-by-Country (DAC4) reports with national statistical institutes without member state discretion. Pushing back against member state criticisms that the measure is disproportionate and infringes on confidentiality, the Commission asserted that statistical secrecy regulations permit full data sharing to improve globalization metrics and macroeconomic analysis. It also defended broader transparency initiatives—including giving tax authorities access to the upcoming anti-money-laundering (AML) single access point to trace beneficial ownership of real estate under DAC1 and granting access to national pension registries—insisting that targeted enforcement enhancements do not contradict the bloc's tax simplification agenda.

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According to budget documents released September 15 alongside the 2027 budget, the Netherlands expects to collect €60 million in Pillar 2 top-up taxes by the close of the 2024 tax filing period, aligning closely with original projections of €55 million from its qualified domestic minimum top-up tax (QDMTT) and €9 million from the income inclusion and undertaxed profits rules. The accompanying 2027 tax plan also incorporates draft legislation implementing the OECD’s side-by-side package, estimating that its safe harbors will result in annual revenue shortfalls of €73 million from reduced profit reshoring and €35 million from substance-based incentive protections—a combined €108 million drag that the Netherlands Bureau for Economic Policy Analysis (CPB) cautioned remains subject to high uncertainty given unpredictable corporate behavior and uneven global minimum tax adoption.

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Sidhu examines the tax treatment of data centers as critical physical infrastructure for the digital economy, and she proposes a system that separates public law pricing from transfer pricing and a method for determining when routine returns, local market adjustments, or profit splits are warranted.

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The European Parliament voted 464–50 on September 15 to approve its negotiating mandate expanding the Carbon Border Adjustment Mechanism (CBAM) to downstream steel- and aluminum-intensive products by 2028, setting up a sharp clash with member states over market flexibility and anti-circumvention rules. While Tax and Climate Commissioner Wopke Hoekstra urged lawmakers and the EU Council to finalize negotiations before year-end, Parliament excised the controversial Article 27a emergency suspension clause—labeled by rapporteur Mohammed Chahim as a veiled subsidy for carbon-intensive foreign fertilizers—in favor of redirecting carbon border revenues directly to harmed internal market sectors, while simultaneously demanding enhanced enforcement against distance-selling platforms and artificial supply chain restructuring.

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