Key Amendments and Their Implications for Treaty Policy and Multinational Businesses

On August 28, 2026, the United Nations released the 2025 UN Model Double Taxation Convention[1] (the "2025 UN Model"), representing the first substantive update to the UN Model since 2021. The update comes at a time when the UN is playing an increasingly prominent role in shaping international tax policy. As discussed in A&M's July 2026 Tax Policy Insights[2] article on the proposed UN Framework Convention on International Tax Cooperation (UNFCITC), international tax discussions continue to evolve as the UN takes a more active role in shaping the future of international tax cooperation. The release of the 2025 UN Model provides a practical illustration of how some of these broader policy themes are beginning to be reflected in treaty policy developments.

While the 2025 UN Model and the UNFCITC negotiations are separate initiatives, both reflect a number of common themes. In particular, they signal a continued focus on expanding source-country taxing rights, modernizing the taxation of cross-border services, and adapting traditional treaty concepts to better reflect evolving business models and economic activity. They also reinforce the growing influence of developing countries in shaping international tax policy and treaty standards.

Key Amendments

The 2025 UN Model introduces a number of significant changes that, taken together, reflect the UN's continued focus on expanding source-country taxing rights and modernizing treaty provisions to address evolving business models and cross-border activities. The table below summarizes the key amendments and their potential practical implications:

Taken together, the amendments reflect a continued emphasis on expanding source-country taxing rights and modernizing treaty provisions to better reflect evolving business models and cross-border activities. Several changes, including Articles 5A, 12AA, and 12C, provide source countries with broader taxing rights over natural resource activities, cross-border services, and insurance premiums, while the new subject-to-tax rule seeks to address situations in which income is subject to a low level of taxation in the recipient jurisdiction. More broadly, the amendments demonstrate the UN's continued focus on ensuring that treaty provisions remain relevant in an increasingly digital and service-driven economy, particularly from the perspective of developing countries.

Implications and Impact

The 2025 UN Model reinforces a broader trend toward expanding source-country taxing rights and may provide developing countries with greater scope to tax income derived from economic activities conducted within their jurisdictions. Amendments such as Articles 5A and 12AA suggest a growing willingness to move beyond traditional treaty concepts and to allocate taxing rights more closely to the location of natural resources, services, and other income-generating activities.

For multinational groups, the most significant development is likely to be the broadened scope of Article 12AA. If incorporated into future bilateral treaties, the provision could extend source-country taxation to a wider range of cross-border services than under the existing ‘fees for technical services’ framework. Businesses may therefore need to reassess the potential withholding tax implications of management, advisory, support, and intra-group service arrangements, particularly where existing structures rely on treaty protection for service income.

The amendments may also increase the importance of reviewing cross-border operating models and investment structures. The new subject-to-tax rule could affect arrangements involving low-tax or preferential tax regimes, while Articles 5A and 12C may result in greater source-country taxation of natural resource activities and insurance premiums respectively. The practical impact of these provisions will ultimately depend on how they are adopted in future treaty negotiations and the specific rates and thresholds agreed by treaty partners.

More broadly, the amendments are consistent with themes emerging from the UN Framework Convention on International Tax Cooperation discussions, including greater emphasis on source-country taxation, taxation of cross-border services, and the evolving role of developing countries in shaping international tax policy. Although the 2025 UN Model does not itself create binding obligations, it is likely to influence future treaty negotiations and may provide an indication of the direction of travel for international tax policy in the years ahead.

Conclusion

The 2025 UN Model reinforces the UN's continued focus on expanding source-country taxing rights, particularly in relation to cross-border services, natural resource activities, and insurance premiums. While the model itself is not binding, it is likely to influence future treaty negotiations and provides a useful indication of the direction of international tax policy. Taxpayers should continue to monitor how these provisions are adopted in bilateral treaties and assess the potential implications for their cross-border structures and arrangements.

USA

August 10, 2026: Final Regulations Align Backup Withholding on Third-Party Network Transactions with OBBBA Thresholds[4]

Treasury and the IRS finalized regulations (TD 10053), without substantive changes from the proposed rules, aligning backup withholding for third-party network transactions with the OBBBA reporting thresholds. A payment settling a transaction through a third-party network (such as a payment app or online marketplace) is a reportable payment subject to backup withholding only if a payee’s transactions exceed 200 in number and USD 20,000 in aggregate value during the calendar year; once a payee is reportable in one year, the threshold exception does not apply to it in the following year. The regulations took effect August 10, 2026, and apply to payments made in calendar years beginning after December 31, 2024.

August 13, 2026: Fifth Circuit Revisits Limited Partner Rule for Self-Employment Taxes[5]

The Fifth Circuit withdrew and replaced its prior opinion in Sirius Solutions L.L.L.P. v. Commissioner, now captioned K Alain, L.L.L.P. v. Commissioner, and adopted a new framework for applying the limited partner exception to self-employment tax. The court held, in a 2-1 decision, that a ‘limited partner’ for purposes of the self-employment tax exception, is a partner who plays no significant role in managing or running the business. In doing so, the court rejected both a pure state-law limited partner status approach and the Tax Court’s passive-investor standard, vacated the Tax Court’s decision, and remanded for further proceedings.

Please refer to A&M Tax Alert[6] for detailed analysis.

August 14, 2026: Maryland Court Invalidates Digital Advertising Tax on Constitutional Grounds[7]

The Maryland Tax Court ruled in favor of Apple, Google, and Peacock TV, holding that Maryland's Digital Advertising Gross Revenues Tax violates the federal Internet Tax Freedom Act because it taxes digital advertising while comparable non-digital advertising is not subject to the tax. The court also held that the tax violates the dormant Commerce Clause and the Due Process Clause because its graduated rate structure is based on a taxpayer's worldwide revenue, thereby linking Maryland tax liability to out-of-state activity. In the Peacock case, the court further found that exemptions for certain news media and broadcast entities violate the First Amendment.

August 20, 2026: US Proposes Narrower FDDEI Scope For Property Disposal Gains[8]

Treasury and the IRS proposed regulations (REG-117130-25) implementing OBBBA amendments to section 250, which exclude income and gain from the sale or other disposition of intangible property and property subject to depreciation, amortization, or depletion from deduction eligible income (DEI) and foreign-derived deduction eligible income (FDDEI). The proposed regulations clarify that a copyrighted article, including a copy of digital content, is not treated as intangible property and that property is considered depreciable, amortizable, or depletable based on its character in the seller's hands, excluding property always held as inventory. The rules generally apply to sales or other dispositions occurring after June 16, 2025, and comments are due by October 5, 2026.

August 26, 2026: Proposed Regulations Address CFC Income Allocation Following OBBBA Changes[9]

Treasury and the IRS proposed regulations (REG-115646-25) implementing OBBBA amendments to sections 951 and 951A, under which a US shareholder may be required to include a CFC's subpart F income, tested income, or tested loss based on stock ownership during any portion of the CFC's taxable year rather than only on the last relevant day. The proposed regulations generally adopt a daily proration approach when CFC ownership changes, require the taxable year of a foreign corporation to close when it becomes or ceases to be a CFC, and provide guidance on the OBBBA transition rule for certain dividends. The rules would generally apply to CFC taxable years beginning after December 31, 2025, and comments are due by October 26, 2026.

France

August 1, 2026: France Repeals Reduced One-Year Time Limit for Withholding Tax Claims[10]

France has abolished the special one-year deadline that previously applied to withholding tax refund claims, through Decree No. 2026-692. The measure follows a Supreme Administrative Court decision and removes the shortened period that required claims to be filed by December 31 of the year following the withholding of tax. Effective July 30, 2026, withholding tax claims are now subject to the standard deadline applicable to tax claims, generally allowing taxpayers to submit claims until December 31 of the second year following payment of the tax.

August 12, 2026: France Releases Further Guidance on Temporary Tax Levy for Large Corporates[11]

The French tax authorities have updated their guidance on the temporary exceptional corporate income tax surcharge applicable to large companies, reflecting its extension for an additional year under the 2026 Finance Law. The revised guidance sets out the rules for the second year of application, covering financial years ending on or after December 31, 2025. It confirms that the revenue threshold for entities subject to the surcharge has increased from EUR 1 billion to EUR 1.5 billion for the second financial year ending on or after December 31, 2025. The guidance also explains that eligible foreign tax credits may be used to offset the surcharge, where permitted under an applicable tax treaty, although such credits cannot be applied against advance payments and may be claimed only when the final tax liability is assessed.

August 31, 2026: France Moves Ahead with Mandatory E Invoicing and Digital Reporting Framework[12]

The French Ministry of Economy and Finance has reminded businesses of the phased implementation of France’s electronic invoicing and transaction reporting regime, effective September 1, 2026. From that date, large and intermediate-sized enterprises will be required to issue electronic invoices and transmit transaction data to the tax authorities, while small- and medium-sized enterprises will become subject to the same requirements from September 1, 2027.

Germany

August 6, 2026: Federal Fiscal Court Clarifies Treaty Treatment of Shipping Agency Arrangements[13]

A German limited partnership handled all booking and chartering business for its Swiss parent, a shipping company operating vessels in international traffic. The Swiss company held the entire capital interest and remunerated the German entity on a cost-plus basis. Following a tax audit, the German tax authorities treated the partnership as a business in its own right and assessed its profits to German tax, including trade tax. The tax court in Hamburg ruled against them, and the tax authorities appealed. The Federal Fiscal Court dismissed the appeal. The treaty's shipping article takes precedence over the general business-profits rule and expressly covers agencies whose work is directly connected with shipping operations. Where a German entity does nothing but support the shipping business of the foreign owner holding its entire capital, the two are too closely intertwined to be treated as separate businesses for treaty purposes. The court noted that the outcome should not depend on whether the shipping company runs its German agency through a branch or through a partnership. The profits are therefore taxable only in Switzerland, where the shipping company is managed, and no German trade tax arises. The partnership itself is not entitled to treaty benefits but may rely on the entitlement of its partner.

August 6, 2026: German Court Clarifies Anti-Double-Dip Provisions in Cross-Border Partnership Financing[14]

The Federal Financial Court recently published a decision dated June 11, 2026, clarifying that Germany's anti-double-dip rules may deny a tax deduction even where the corresponding expense is not formally deducted under foreign tax law. In the case at hand, a Dutch company financed its investment in a German limited partnership through an intragroup loan, with the related interest expense deducted in Germany. Although the Dutch fiscal unity regime did not separately recognize the corresponding interest income and expense for Dutch tax purposes, the Court determined that the financing arrangement effectively reduced taxable income in the Netherlands. The Court therefore held that the anti-double-dip provision applies whenever an expense produces a tax benefit in another jurisdiction, regardless of how, or at which taxpayer's level, the reduction technically occurs abroad, and upheld the denial of the German interest deduction.

August 12, 2026: Germany Moves Forward With Annual Tax Act 2026 and OECD Pillar Two Simplification Measures[15]

Germany’s Federal Cabinet approved the draft Annual Tax Act 2026 with a range of measures aimed to simplify tax administration, enhance digitalization, strengthen anti-abuse provisions, and align German tax rules with EU law and judicial developments. Key proposals include the implementation of the OECD Pillar Two Side-by-Side Package, tightened anti-abuse rules for capital gains tax relief procedures, increasing the withholding tax exemption threshold for certain foreign license payments, expanding cross-border tax information exchange, enhancing research tax incentives etc. The draft bill is progressing through the parliamentary process and will require approval from both the lower house (Bundestag) and the Federal Council (Bundesrat) before becoming law.

August 13, 2026: Germany’s Federal Fiscal Court Clarifies Application of Minimum Taxation Rules and Equitable Relief for Loss Carry forwards[16]

Germany’s Federal Fiscal Court has specified the consequences of a Constitutional Courts ruling[17] that the minimum-taxation rules limiting corporate loss carryforwards are constitutional even where their application permanently forfeits losses, and clarified that the EUR 1 million minimum-taxation basic amount applies only once, not annually, across a corporation’s extended liquidation tax period. However, the court noted that equitable relief under Section 163 of the German Tax Code should be seriously considered where loss forfeiture arises from accounting-related reversal effects, such as loan write-downs and subsequent reversals. The decision reaffirms the validity of Germany's loss utilization restrictions while recognizing that relief may be available in exceptional cases involving definitive loss forfeiture.

August 20, 2026: Germany’s Federal Fiscal Court Sets Limits on Treaty Protection Against Hidden Profit Distributions[18]

In two essentially identical cases, a German GmbH acquired a German property and was invoiced by a Cyprus-resident group company for services connected with the purchase - contract review, price negotiations, technical due diligence, and verification of the rent roll. The German tax authorities treated the fee as a hidden profit distribution, on the basis that no clear advance written agreement existed between the parties, a requirement German case law imposes where a controlling shareholder or a person close to it is involved. The tax court in Berlin-Brandenburg held that the Germany–Cyprus treaty blocked this correction. The Federal Fiscal Court agreed on the central point: the arm's length article of the treaty bars a hidden profit distribution based purely on such formal requirements, and the court's departure in recent years from a broader blocking effect does not change this. Formal criteria are not ‘conditions’ the parties are bound by; they concern only how and when conditions were agreed and implemented. They may still serve as indirect evidence of whether the underlying terms are at arm's length. The treaty protection has a threshold, however. It applies only between enterprises within the meaning of the treaty, which requires an actual business activity. Purely asset-managing activity does not qualify, and the German rules deeming certain entities to be commercial do not apply for treaty purposes. Since the German company appeared to be a single-property entity earning rental income and claiming the extended trade tax deduction, the lower court could not treat it as an enterprise without further findings. Both cases were referred back for those findings, including whether standardized group-wide arrangements existed for all property acquisitions.

August 20, 2026: Federal Fiscal Court Clarifies Arm’s Length Assessment of Intra-Group Loans[19]

A German GmbH financed the construction of a hotel in Ukraine by a related company at 11–12% interest, repeatedly increasing and extending the loan. Security consisted of the construction permit, the ground lease, and technical documentation; nothing was ever repaid. After building defects emerged and the hotel was never officially accepted, the lender wrote the claims down to zero. The tax authorities disallowed the write-downs, and the lower court upheld this by finding the loan conditions non-arm's-length. The Federal Fiscal Court set aside the lower court's decision confirming that view. The lower court had assumed inadequate security without establishing what security was possible and customary under Ukrainian law, while itself finding that ownership arises only on official acceptance and that the land was merely leased. Whether a lender would accept an unsecured position for a risk premium must also be judged from the position when the loan was granted, not from how it turned out, and commercial reasons matter: an independent party might likewise advance further funds to protect an investment already made. Even where terms are not at arm's length, the correction is, in principle, limited to the interest shortfall rather than a full reversal of the write-down. The court added that the formal requirements applied to controlling shareholders are blocked by the arm's length article of the Germany–Ukraine treaty, consistent with its recent Cyprus decisions.

Ireland

August 21, 2026: Ireland Updates Guidance on Foreign Tax Credit for Section 110 Companies[20]

Irish Revenue has issued updated guidance on the treatment of foreign withholding taxes incurred by Securitization and Financing Vehicles (Section 110 Companies). The guidance clarifies that such taxes are not deductible when determining taxable profits. Rather, relief may be available under Ireland's double taxation relief provisions, either as a foreign tax credit or, in certain circumstances, as a deduction against taxable income.

August 24, 2026: Irish Revenue Clarifies Crypto-Asset Reporting Framework and DAC8 Obligations[21]

Irish Revenue has released guidance outlining the compliance obligations of Reporting Crypto-Asset Service Providers under the OECD Crypto-Asset Reporting Framework and the EU’s DAC8 Directive, applicable from January 1, 2026. In-scope providers will be required to identify reportable users, collect and validate tax residency information, maintain appropriate due diligence procedures, and report specified crypto-asset transactions to Revenue on an annual basis. The guidance also clarifies the rules for determining reporting jurisdiction, avoiding duplicate reporting obligations, maintaining records, and addressing non-compliance risks, with annual reporting generally due by May 31 following the relevant reporting year.

August 28, 2026: Ireland Updates Pillar Two Guidance on Treatment of Pre-Transition Tax Adjustments[22]

Irish Revenue issued updated Pillar Two guidance confirming that tax adjustments relating to period prior to a group's entry into the regime should generally be disregarded when calculating the current effective tax rate (ETR). The guidance also explains that, while pre-transition deferred tax adjustments do not affect the ETR of the year in which they arise, they remain relevant for determining transition-period deferred tax positions and the treatment of future reversals.

Italy

August 6, 2026: Italian Court Excludes Direct Online Sales From Digital Services Tax Scope[23]

The Milan Tax Court ruled that direct sales conducted through an online platform do not give rise to Digital Services Tax (DST) liabilities. The taxpayer operated both a marketplace model (conceded to be subject to DST) and a consignment model, under which it took title to goods only upon a customer’s order and contracted directly with the customer, bearing the commercial risks of the sale. In reaching its decision, the Court focused on the economic function performed in each transaction, concluding that only genuine digital intermediation activities are subject to DST. The ruling highlights the need for businesses operating hybrid platform models to separately assess marketplace and direct-sale revenue streams for DST purposes.

Please refer to A&M Tax Alert[24] for detailed analysis.

August 11, 2026: Italy's Omnibus Decree Introduces Broad Tax Reform Measures[25]

Italy has introduced additional measures as part of its ongoing tax reform program, with the new provisions taking effect from August 12, 2026. In addition to Pillar Two and dividend withholding tax measures, the reforms include updates to the definition of dependent family members for personal income tax purposes, changes to the taxation of employer-provided vehicles, and the introduction of a 26% substitute tax on the positive differentials realized by professionals on tax credits purchased at a discount and subsequently offset or transferred. The package also defers to December 31, 2026, the deadline for undertakings that applied for cooperative compliance in the 2024 and 2025 tax periods to obtain tax control framework certification, and restores the biennial window for exercising the right to deduct input VAT, which may now be exercised at the latest in the annual return for the second year following that in which the right arose.

August 11, 2026: Italy Incorporates OECD Pillar Two Side-by-Side Package Into Domestic Minimum Tax Rules[26]

Italy has amended its Pillar Two legislation through the Omnibus Decree to incorporate the OECD's Side-by-Side Package and related simplification measures. The changes introduce new safe harbor provisions that may eliminate top-up tax liabilities for groups operating through jurisdictions recognized as meeting the OECD's minimum tax standards. The legislation also adopts the agreed treatment of qualified tax incentives through a substance-based tax incentive safe harbor, subject to a substance cap, and introduces on an optional basis the new Simplified ETR safe harbor together with a one-year extension of the transitional CbCR safe harbor. Italy's Qualified Domestic Minimum Top-up Tax (QDMTT) continues to apply in all cases. Implementing ministerial decrees are due within 90 days of entry into force. Subject to election, the new measures generally apply to fiscal years commencing on or after January 1, 2026.

August 11, 2026:Italian Decree Introduces Measures Affecting Cross-Border Losses, PEs and Pension Funds[27]

Italy’s Omnibus Decree raises the withholding tax on dividends paid to EU/EEA pension funds and pan- European Personal Pension Products (PEPP) sub-accounts from 11% to 20% for dividends paid from August 12, 2026, aligning the rate with the substitute tax borne by Italian supplementary pension schemes. The change follows a line of Supreme Court authority (including decisions nos. 25691, 25692, and 25963 of 2022) holding that confining the 11% rate to EU/EEA funds unlawfully restricted the free movement of capital to the detriment of third-country funds; the legislature has responded by equalizing upward rather than extending the reduced rate. A residual comparability question remains, since Italian funds are taxed on the net management result, whereas foreign funds bear withholding on the gross dividend. The Decree also introduces, under amended article 181 of the Income Tax Code, a regime for recognizing final losses of a foreign company in an EU/EEA cross-border merger where the merging companies are commonly controlled and the foreign losses are definitively unusable in the foreign state; new documentation requirements requiring domestic permanent establishments’ accounts to carry a legally certain date and be disclosed in a dedicated corporate tax (imposta sul reddito delle società, (IRES)) return schedule from the 2026 tax year; and an increase in the substitute tax on non-listed ‘blacklisted’ participations from 21% to 36%, payable in full rather than in three annual installments.

Netherlands

August 10, 2026: Netherlands Updates Pillar Two Q&A on Penalties, Interest, and Filing Obligations[28]

The Dutch tax authorities issued an updated question and answer (Q&A) document on the operation of the Minimum Tax regime, providing further clarification on penalties, tax interest, and compliance requirements. The document confirms that the temporary administrative relief from default and offense fines for certain filing and payment obligations until October 31, 2026, does not affect the statutory rules governing appeal deadlines or the accrual of tax interest. It also clarifies that no filing extensions will be granted for overdue top-up tax information returns; however, a lenient approach to penalties will generally be adopted when returns relating to financial years ending on December 31, 2024, are submitted by December 31, 2026.

August 14, 2026: Debt Arising on Spin-Off May Trigger Taxable Shareholder Benefit, Dutch Authorities Clarify[29]

The Dutch tax authorities have confirmed that when a spin-off results in the creation of a debt without corresponding consideration, the resulting value transfer constitutes a taxable benefit for a substantial shareholder. Such income falls within the Dutch substantial shareholding (Box 2) regime and is subject to the applicable Box 2 tax rates, currently 25% on income up to EUR 68,843, and 31% on the excess.

August 18, 2026: Netherlands Revises Rules for Tax-Neutral Merger and Split-Up Relief[30]

The Netherlands has published revised administrative guidance on tax-exempt legal mergers and split-ups, both effective August 19, 2026. Among other clarifications, the establishment requirement does not apply when a non-discrimination treaty clause is in place. The guidance further notes that confirmation from a tax inspector that exemption requirements are met does not, by itself, preclude a finding of tax avoidance. In addition, it confirms the continued availability of loss carry-forwards following a qualifying merger, provides rules for preserving taxation of unrealized gains when only the acquiring entity benefits from the extended-profit regime, and sets out the treatment of mergers involving entities using different functional currencies, including the translation of transferred assets and liabilities based on the exchange rate prevailing immediately prior to the merger.

August 19, 2026: Netherlands Revises Tax Treaty Interpretation Guidance[31]

The Dutch State Secretary for Finance has issued an updated decree clarifying the Netherlands’ position on several recurring treaty issues. Key updates cover shipping and capital gains articles that allocate taxing rights over ship-operation or disposal profits based on the enterprise’s place of effective management; a Swiss Anlagestiftung qualifies as a pension fund under the Netherlands-Switzerland treaty; share buybacks are dividend income (not capital gains) under the Germany and Switzerland treaties, so the Netherlands may levy its full 15% dividend tax; the France treaty’s extraterritorial-taxation prohibition may preclude a conditional withholding tax on dividends under the 2021 Withholding Tax Act; double taxation on German mezzanine loan interest can be resolved via a mutual agreement procedure; bank fees unrelated to lending money are not ‘interest’ for withholding-tax offset purposes unless a treaty defines interest more broadly; rental payments for forklifts, trucks, containers, and pallets are royalties under the Czech Republic, Italy, Poland, and Portugal treaties; software license fees are royalties only where the payment relates to underlying copyright use under the China and Korea treaties; offshore permanent establishment income is exempt under the Denmark treaty, even absent Danish tax due to mandatory consolidation; and storing means of transport at various Dutch locations for a sufficiently long period can constitute a Dutch permanent establishment.

Spain

August 13, 2026: Spain Confirms Participation Exemption Survives Share Buy-Back Below 5% Threshold, Clarifies CbCR Safe Harbour Treatment[32]

Spain’s Directorate General of Taxes has confirmed, in a binding ruling, that a Spanish subsidiary’s planned sale of a 0.86% stake (acquired pre-2021 for over EUR 20 million) back to its French parent through a share buy-back remains eligible for the transitional participation exemption preserving pre-2021 holdings, despite falling below the current 5% ownership threshold. On Pillar Two, because the participation is classified as an equity instrument under International Financial Reporting Standards (IFRS) 9, the DGT held that fair value changes and any disposal gain recognized directly in equity (rather than profit or loss) do not enter the profit-before-tax figure used to calculate Spain’s simplified effective tax rate under the transitional CbCR safe harbor, so the buy-back gain will not affect that calculation.

August 1, 2026: Binding Ruling Clarifies Carried Interest Treatment Under the Beckham Regime[33]

This ruling (V5374/2026) addresses the tax treatment of carried interest earned by an executive before relocating to Spain, but quantified and paid after becoming a Spanish tax resident under the Beckham regime. The DGT confirmed that, although employment income is generally deemed Spanish-source while applying the regime, this principle does not extend to income that derives entirely from activities performed abroad prior to the relocation. As a result, where the carried interest is linked exclusively to services rendered outside Spain and lacks any other territorial nexus with Spain, it falls outside the scope of Spanish taxation. This ruling is particularly relevant because it further clarifies the interaction between the Beckham regime and deferred remuneration arrangements. The Spanish Directorate-General for Taxes emphasizes that the key factor is the economic origin of the income and when and where the underlying services were performed, rather than the timing of payment or receipt. In doing so, the ruling provides additional guidance on the application of the regime to complex compensation structures that were not expressly contemplated when the rules were originally introduced.

United Kingdom

August 25, 2026: UK GAAR Panel Finds Umbrella-Company Dual-Payment Wage Arrangements Unreasonable[34]

The UK tax authority, His Majesty's Revenue and Customs (HMRC), has published three anonymized General Anti-Abuse Rule (GAAR) Advisory Panel opinions concluding that remuneration arrangements paying umbrella-company employees two amounts in the same payroll run, a wage at or near the national minimum wage with income tax and Class 1 National Insurance contributions (NICs) deducted, plus a larger secondary payment from another entity without deductions, were not a reasonable course of action and fall within the GAAR.

China

August 27, 2026: China Issues Clarification on VAT Treatment of Non-Taxable Transactions[35]

On August 27, 2026, the Ministry of Finance (MOF) and State Taxation Administration (STA) issued Announcement No. 25 clarifying when input VAT must be disallowed for non-taxable transactions under the new VAT regime. Transactions, including certain offshore supplies, equity transfers, dividend income, and commodity futures, may result in input VAT restrictions, while insurance proceeds, donations, certain compensation payments, and other specified items do not. The rules take effect from September 1, 2026, and also apply to unresolved matters arising from January 1 to August 31. Businesses, particularly holding companies and regional headquarters, should review their input VAT attribution and allocation methodology.

August 1, 2026: Five-Year CIT Installment Treatment for Asset Exchanges in Strategic Technology Sectors[36]

Under Announcement No. 23, qualifying integrated circuit and industrial machine tool enterprises may spread gains from non-monetary asset exchanges occurring between 2026 and 2028 over a maximum five-year period for CIT purposes. A non-qualifying counterparty remains subject to the ordinary tax rules, while both parties may benefit where both independently qualify. Where the transaction also qualifies for special reorganization treatment under Circular 59 or related rules, the taxpayer may elect one treatment, with the election being irrevocable.

August 10, 2026: New China–Norway Tax Treaty to Apply From 2027[37]

The STA confirmed in August that the new China–Norway tax treaty has entered into force and will apply to income arising in tax years beginning on or after January 1, 2027. Key provisions include a 5% dividend withholding tax ceiling for qualifying corporate beneficial owners holding at least 25% for a 365-day period, a 10% rate in other dividend cases, a 12-month construction PE threshold, and a 183-day service PE test. Groups with China–Norway investment or service arrangements should review their treaty positions ahead of 2027.

August 14, 2026: Jiangsu Introduces an Advance Ruling–Style Route for Cross-Border Tax Issues[38]

On August 14, the Jiangsu Tax Service introduced a written-opinion mechanism for planned, material, and complex cross-border transactions. The scope expressly includes treaty-benefit eligibility, special tax treatment for non-resident share transfers, and the ‘reasonable commercial purpose’ test for indirect transfers. Although the mechanism is not formally an Advance Ruling and the written opinion does not itself determine a taxpayer’s legal rights or obligations, it provides a practical route to greater pre-filing tax certainty. For significant dividends, restructurings, or M&A transactions, businesses may consider using such mechanisms to clarify material tax positions with the tax authority before implementation rather than relying solely on historical filing practice. Jiangsu also maintains a separate, formal Advance Ruling regime for qualifying large enterprises.

India

August 14, 2026: Gujarat High Court Holds Corporate Guarantees Taxable Under GST, Strikes Down Retrospective Valuation[39]

The Gujarat High Court, in Torrent Power Ltd. v. Union of India & Ors., has held that a corporate guarantee given by a holding company to a bank or financial institution on behalf of a subsidiary is a taxable supply of services subject to GST, rejecting arguments that it is an excluded actionable claim or a shareholder activity.

Please refer to A&M Tax Alert[40] for detailed analysis.

August 17, 2026: Taxation and Other Laws (Amendment) Act, 2026, Introduces Key Tax Reforms[41]

The Taxation and Other Laws (Amendment) Bill, 2026, was introduced in the Lok Sabha on August 4, 2026, passed by the Lok Sabha on August 6, 2026, and received Presidential assent on August 17, 2026, thereby enacted as the Taxation and Other Laws (Amendment) Act, 2026 (TOLA). It is generally effective from April 1, 2026, unless otherwise provided, and replaces the Income-tax (Amendment) Ordinance, 2026, and introduces targeted amendments to the Income-tax Act, 2025, the Finance Act, 2026, and the Payment and Settlement Systems Act, 2007. TOLA has introduced targeted amendments with a stated focus on promoting manufacturing, strengthening India’s position as a data center and fund management hub, facilitating diamond trading, and providing greater tax certainty to investors and business structures. The amendments also seek to enhance the ease of doing business by simplifying existing conditions and extending specific tax incentives. A notable amendment was the rationalization of the Eligible Investment Fund framework, with the number of qualifying conditions proposed to be reduced from 13 to 5, thereby simplifying the framework and providing greater tax certainty for offshore funds seeking to undertake fund management activities from India. The Act also introduced measures aimed at strengthening India's position as a data center and fund management hub, extended and streamlined certain tax incentives for manufacturing and diamond trading activities, and simplified several compliance-related conditions to improve the ease of doing business.

August 21, 2026: Government Notifies Rules for Foreign Assets of Small Taxpayers Disclosure Scheme, 2026[42]

The Government of India notified the Foreign Assets of Small Taxpayers Disclosure Scheme Rules, 2026 (FAST-DS Rules), providing operational guidance for the recently introduced disclosure scheme for certain undisclosed foreign assets and foreign-sourced income. The Rules prescribe eligibility criteria, valuation methodologies, filing requirements, and payment procedures, together with a set of Frequently Asked Questions (FAQs) clarifying various practical aspects of the scheme. Eligible taxpayers may make disclosures during the specified window and, subject to meeting the prescribed conditions, obtain relief from further tax, penalty, and prosecution under the Black Money Act. Taxpayers with historical foreign asset reporting gaps should assess the applicability of the scheme and the associated compliance requirements before the disclosure window closes.

Indonesia

August 5, 2026: Indonesia Defers E-Commerce Withholding Tax to November 1[43]

Indonesia’s Directorate General of Taxes has postponed, to November 1, 2026, the implementation of Minister of Finance Regulation No. 37 of 2025, requiring e-commerce platforms to withhold article 22 income tax on domestic sellers’ income, citing the need to maintain public purchasing power amid current economic conditions. The DGT will revoke and reissue its earlier appointment decisions before the new date, and any article 22 tax already collected under the revoked decisions must be refunded to affected traders.

Malaysia

August 1, 2026: Malaysia Extends Foreign Capital Asset Gains Tax Exemption to 2030[44]

Malaysia’s Ministry of Finance has extended, via the Income Tax (Exemption) (No. 3) Order 2024 (Amendment) Order 2026 (PU(A) 275/2026) gazetted on July 29, 2026, the income tax exemption on gains from the disposal of foreign capital assets received in Malaysia by resident companies, LLPs, trust bodies, and cooperative societies, previously due to expire December 31, 2026, through December 31, 2030.

August 1, 2026: Johor-Singapore Special Economic Zone – Stamp Duty Remission Orders on Specified Instruments[45]

Four stamp duty remission orders were gazetted for the Johor-Singapore Special Economic Zone (JS-SEZ) — P.U.(A) 271/2026 and 272/2026 on July 28, 2026, and P.U.(A) 273/2026 and 274/2026 on July 29, 2026. The orders provide a 40% remission of stamp duty on specified instruments relating to commercial units in Flagship A (Johor Bahru Waterfront) or Flagship B (Iskandar Puteri), covering both instruments of transfer and instruments of loan or financing agreement. The remission is effective from January 1, 2025, to December 31, 2034, subject to the conditions prescribed under the respective orders.

August 27, 2026: Malaysia Updates Transfer Pricing Regime to Align Cross-Border Group Treatment[46]

Malaysia’s Ministry of Finance has gazetted the Income Tax (Transfer Pricing) (Amendment) Rules 2026 (P.U.(A) 300/2026), redefining ‘MNE Group’ as a group of associated enterprises with business establishments in two or more jurisdictions (aligning with the Malaysia Transfer Pricing Guidelines 2024), removing the subrule specifying relationships between a person and its associated person for cost contribution arrangements, and allowing a corresponding offsetting adjustment for the other party to a controlled transaction, upon request and Director General approval, when a transfer pricing adjustment is made. The amendments are deemed effective from the year of assessment 2023.

Singapore

August 1, 2026: Singapore Enhances Fund Tax Incentive Regime for Non-SFO Funds[47]

The Monetary Authority of Singapore issued Circular FDD Cir. 05-2026, introducing refinements and clarifications to Singapore's fund tax incentive schemes. The key changes and clarifications relevant for private capital funds (Non-Single Family Office funds) approved under Sections 13D, 13O, 13OA and 13U of the Singapore Income Tax Act, 1947, include the removal of the annual minimum Assets under Management (AUM) in Designated Investments (DI) requirement, with retrospective effect from January 1, 2025, as well as clarifications on the application of the closed-end fund treatment, foreign-sourced income rules, third-party investor requirements, co-management arrangements, and filing obligations for certain foreign investors.

Please refer to A&M Tax Alert[48] for detailed analysis.

August 19, 2026: Singapore Announces New Tax Incentives and Strategic Measures for the Asset Management Sector[49]

The Monetary Authority of Singapore has announced proposed measures to strengthen Singapore’s position as a global asset management hub, including a tax exemption from year of assessment 2027 for profit-related returns (such as carried interest) received by corporate entities, partnerships, or individuals for providing fund management services to funds already benefiting from exemptions under sections 13D, 13O, 13OA, 13U, or 13V of the Singapore Income Tax Act; a new hedge fund investment program under which MAS would co-invest with managers committed to Singapore; and a new Investment Management track within the ONE Pass framework for global asset-management leaders and senior professionals, potentially recognizing performance- or returns-linked remuneration in salary assessment. Further details are expected in Budget 2027.

Vietnam

August 24, 2026: Reduced Personal Income Tax (PIT) and Corporate Income Tax (CIT) for Individuals and Enterprises[50]

On August 24, 2026, Vietnam adopted Resolution No. 43/2026/QH16, effective from the same date and applicable to the 2026 and 2027 tax years. The resolution provides a 30% reduction in PIT payable for 2026 and 2027 on business income earned by resident individuals whose annual revenue does not exceed VND 10 billion (approximately USD 385,000), and a 30% reduction in CIT payable, after applying any available CIT incentives, for 2026 and 2027 for enterprises and organizations established under Vietnamese law whose annual revenue does not exceed VND 10 billion (approximately USD 385,000). Specific rules apply in determining eligibility when an enterprise undergoes a division or separation. The resolution provides meaningful tax relief for eligible SMEs, newly established enterprises, and resident individuals conducting business in Vietnam.

Thailand

August 1, 2026: Thailand Introduces Enhanced Registration Requirements for Companies With Foreign Ownership or Management[51]

Under Order No. 2/2569 (2026), issued on July 14, 2026, and effective from August 1, 2026, Thailand’s Central Partnership and Company Registration Office introduced enhanced documentation requirements for the registration or amendment of (i) partnerships and limited companies with foreign investors holding less than 50% of the registered capital and (ii) companies with no foreign shareholding but having a foreign authorized signatory director. This order is aimed at preventing the use of Thai nominees to circumvent foreign-participation laws. Required documents include an investment explanation letter, three months of Thai investors’ bank statements showing the funding withdrawals, and business-account statements showing receipt of the investment; entities newly registered on or after August 1, 2026, that make such changes within one year must also submit a written investment explanation and supporting bank statements.

August 7, 2026: Thailand Allows Electronic Display of VAT and SBT Registration Certificates[52]

The Thai Revenue Department (TRD) issued a notification, effective August 7, 2026, prescribing the electronic display of VAT/SBT registration certificates (i.e., Por.Por.20, Por.Tor.20). Such certificates may be displayed in lieu of physical documents as long as government authorities and relevant parties can verify the information contained in those certificates. This notification supports Thailand's broader digital government initiative aimed at modernizing public administration and facilitating electronic interactions between taxpayers and government agencies. The notification is expected to reduce administrative burdens associated with maintaining and presenting physical licenses while supporting the continued digitalization of tax administration processes and regulatory compliance.

August 19, 2026: Thailand Issues Royal Decree Prescribing Certain Additional Entities Not Treated as Constituent Entities[53]

Thailand issued a Royal Decree prescribing additional certain entities not treated as constituent entities, which are pension service entities established and operated primarily to support qualifying pension funds and retirement benefit arrangements, applying to accounting periods beginning on or after January 1, 2025. The rules and are intended to align Thailand's domestic framework more closely with the OECD GloBE Model Rules by providing greater certainty to in-scope multinational enterprise groups when determining constituent entities and assessing their Pillar Two compliance obligations.

Japan

August 31, 2026: Japanese Government Ministries and Agencies Submitted Their FY2027 Tax Reform Requests[54]

On August 31, 2026, various Japanese government ministries and agencies submitted their requests for the FY2027 tax reform package. Key proposals include revisions to the acquisition cost thresholds applicable to depreciable assets; changes to the valuation methodology for unlisted shares; the introduction of a new tax incentive to promote and strengthen business portfolio transformation; and the expansion of the tax rules relating to executive compensation. In Japan, ministries and agencies publish their tax reform requests at the end of August each year. The Japanese government then reviews and discusses the proposals, with the annual Tax Reform Outline (Taiko) typically released in the second week of December, at which point the key elements of the tax reform package are finalized. Subsequently, the relevant tax reform bills are submitted to the National Diet, generally enacted by the end of March, and become effective from April.

Bahrain

August 31, 2026: Bahrain Clarifies DMTT Filing and Notification Requirements for MNE Groups[55]

Bahrain's National Bureau for Revenue (NBR) has released the DMTT Return Filing Manual (Version 1.0), providing guidance on the procedures for filing, payment and refund claims under the Domestic Minimum Top-up Tax (DMTT) regime. The manual also outlines the use of the NBR's DMTT portal and the associated compliance obligations for in-scope multinational enterprise (MNE) groups. According to the guidance, the filing framework consists of a Revenue Test Notification, which determines whether an MNE group falls within the scope of the DMTT rules based on the applicable revenue threshold, and a DMTT Tax Return, which includes the information necessary to identify the group and calculate any DMTT liability. The manual further provides guidance on central filing notifications, information schedules, and tax computation requirements applicable to in-scope groups.

Oman

August 9, 2026: Oman Revises VAT Executive Regulations to Introduce E-Invoicing[56]

Oman has amended its VAT Executive Regulations to require VAT-registered persons to issue tax invoices in a certified electronic format. The new rules apply to taxable and deemed supplies, advance payments, and other cases specified in the regulations, and require electronic and simplified tax invoices to be issued within 15 days of the relevant triggering event. The Oman Tax Authority (OTA) will publish a list of licensed e-invoicing service providers and may grant temporary exemptions from the requirement upon application. The e-invoicing requirements will apply from April 1, 2027, for taxable persons with annual supplies exceeding OMR 5 million, and from October 1, 2027, for those with annual supplies not exceeding that threshold.

Please refer to A&M Tax Alert[57] for detailed analysis.

Qatar

August 27, 2026: Qatar Establishes Operational Framework for Pillar Two Compliance[58]

Qatar's General Tax Authority (GTA) has published six implementing decisions to operationalize the Pillar Two framework. The measures address currency translation rules for Global Anti-Base Erosion (GloBE) and DMTT calculations and payments, introduce transitional simplification measures, including a jurisdictional reporting framework and a Country-by-Country Reporting (CbCR) safe harbor, establish a simplified calculations safe harbor for certain non-material constituent entities, and set out rules for the appointment of a designated local entity. The decisions also prescribe registration and deregistration procedures through the GTA’s electronic platform, including registration deadlines for in-scope Multinational Enterprise (MNE) groups. The decisions apply to fiscal years beginning on or after January 1, 2025.

Saudi Arabia

August 11, 2026: ZATCA Outlines Tax and Customs Rules for SEZs[59]

Saudi Arabia's Zakat, Tax and Customs Authority (ZATCA) has released new guidance outlining the tax and customs treatment available to licensed businesses operating in the Kingdom's Special Economic Zones (SEZs). The guidance confirms a 5% income tax rate for 20 years on income derived from qualifying activities in specified SEZs, while income from non-qualifying activities remains subject to the standard 20% rate. It also addresses withholding tax relief for certain payments to non-residents, the VAT treatment of qualifying transactions and goods movements involving SEZs, and customs duty suspension for qualifying goods entering and subsequently re-exported from an SEZ. In addition, the guidance reiterates existing tax filing and record-keeping obligations and introduces a six-month transition period for compliance with electronic inventory management requirements. The publication is intended to explain the operation of the current SEZ regime and does not amend the underlying legislation.

United Arab Emirates

August 3, 2026: UAE Issues Guidance on Pillar Two Information Returns Filers[60]

The UAE has released Ministerial Decision No. 133 of 2026, identifying the entities within multinational groups that are required to submit a Pillar Two information return to the Federal Tax Authority (FTA) for fiscal years beginning on or after January 1, 2025. The rules cover UAE constituent entities, joint ventures (JVs), certain JV subsidiaries, and specified reverse hybrid entities, while permitting filings to be made through a designated local entity. They also provide that a local filing may not be required when a qualifying return has already been submitted by an ultimate parent entity or designated filing entity in a jurisdiction that maintains a qualifying competent authority agreement with the UAE, subject to notification requirements. The decision was issued on August 3, 2026, and took effect on the date of issuance.

August 26, 2026: UAE Issues Guidance on QDMTT Registration and Compliance Obligations[61]

The UAE FTA has issued guidance on the scope and registration requirements of the QDMTT, which applies to fiscal years beginning on or after January 1, 2025. The guide outlines the entities that fall within the regime, confirms that registration may be required even when no top-up tax is payable due to certain exclusions or safe harbors, and explains the circumstances in which a qualifying entity may register on behalf of other domestic group members. It also clarifies categories of entities that are not generally required to register, sets out the applicable registration deadlines and penalties for non-compliance, and provides details on the registration process through the EmaraTax portal. The guide is intended to assist taxpayers in understanding their obligations under the UAE's QDMTT framework and does not have legal binding effect.

August 26, 2026: New UAE Guidance Addresses QDMTT Treatment for Specific Entities[62]

The UAE FTA has released guidance on the treatment of excluded entities and investment entities under the QDMTT regime. The guide clarifies that these entities generally fall outside the QDMTT charging provisions and are not subject to registration, top-up tax return, or Pillar Two information return obligations, although certain group-level reporting requirements continue to apply and their revenue remains relevant in assessing whether an MNE group falls within the scope of the regime. It also outlines the categories of primary and secondary excluded entities and investment entities, explains circumstances in which an election may bring certain entities within scope, and notes that entities treated as exempt persons or qualifying investment funds under the UAE corporate tax regime do not automatically qualify as excluded entities or investment entities for QDMTT purposes. The guide is intended to assist taxpayers in interpreting the QDMTT legislation and is not legally binding.

Australia

August 4, 2026: Australia Advances Second Phase of CGT and Negative Gearing Reforms[63]

Australia’s government has released exposure drafts of the Treasury Laws Amendment (Tax Reform No. 3) Bill 2026, the second tranche of legislation implementing the negative gearing and capital gains tax reforms announced in the 2026-27 Budget, following the first-stage legislation passed in June 2026. The draft addresses more complex issues, including preserving negative-gearing eligibility for dwellings acquired from a spouse via inheritance or relationship breakdown, defining a ‘new residential dwelling’ (generally one acquired within 24 months of a certificate of occupancy, extended from the 12 months originally proposed), clarifying application to attribution managed investment trusts, exempting capital gains distributed via genuine testamentary trusts, deceased estates, and special disability trusts from the minimum tax on capital gains, and addressing part-year Australian residents and deferred capital gains.

August 19, 2026: ATO Clarifies CGT Consequences of Crypto-Asset Airdrops[64]

The Australian Taxation Office (ATO) has released for comment Draft Taxation Ruling TR 2026/D1, addressing the Capital Gains Tax (CGT) consequences of an ‘airdrop’ - a distribution of a crypto asset requiring no or minimal recipient effort and no exchange of consideration. The ATO takes the view that CGT event A1 (disposal) happens to the issuer at the market value of the asset at the time of the airdrop (unless it is trading stock), while the recipient generally derives no assessable income on receipt (unless carrying on a relevant business or receiving the airdrop as a reward for services) and instead acquires a new CGT asset whose cost base is generally its market value on receipt, with CGT event A1 arising only on the recipient’s later disposal. Consultation closes on October 2, 2026.

August 19, 2026: Australia Proposes Tax Treatment for Wrapped and Unwrapped Crypto Assets[65]

The ATO has released for comment Draft Taxation Determination TD 2026/D2, addressing the CGT consequences of using a smart contract to wrap and unwrap crypto assets (exchanging an asset for its wrapped equivalent to enable compatibility with other protocols or platforms), which does not apply to assets sent to a custodian wallet or to business transactions. The ATO takes the view that CGT event C2 (ending ownership of an intangible asset) happens to the original asset when it is wrapped, with the wrapped asset a new, distinct CGT asset whose cost base is the market value of the original asset transferred; unwrapping similarly triggers CGT event C2 on the wrapped asset and creates a new, distinct holding of the original asset type, and the ATO rejects alternative views that wrapping is a disposal (CGT event A1), a rollover, or a trust arrangement. Consultation closes September 18, 2026.

New Zealand

August 31, 2026: New Zealand Clarifies Tax Characterization of Cross-Border Software Payments[66]

New Zealand’s Inland Revenue has released for public consultation a draft interpretation guideline (PUB00266) explaining how payments from New Zealand customers or distributors to non-resident software suppliers should be classified across cloud computing services, copyright sales and licensing, sales and leasing of copyrighted articles, know-how, and development/modification services, generally as service income, a capital asset sale, royalties for IP or know-how use, or a goods sale or lease, with payments to a New Zealand reseller in a cloud arrangement generally treated as for services. Depending on classification, withholding tax obligations may arise on royalties, on schedular payments to non-resident contractors, or on the interest component of certain copyrighted-article finance leases, subject to any relevant tax treaty. Submissions close on October 31, 2026.

• The President of the United Arab Emirates signed Federal Decree No. 110 of 2026 ratifying the economic partnership agreement between the UAE and the Eurasian Economic Union (Armenia, Belarus, Kazakhstan, Kyrgyzstan, and Russia), which was signed on June 27, 2025.[67]
• On August 4, 2026, the Trump Administration reported having completed approximately USD 100 billion in refunds (duties and interest) of tariffs imposed under the International Emergency Economic Powers Act (IEEPA), following the Supreme Court’s February 20, 2026, ruling in Learning Resources, Inc. v. Trump that IEEPA does not authorize the President to impose tariffs; US Customs and Border Protection has liquidated or reliquidated 17.69 million entries without IEEPA duties through an automated refund mechanism.[68]
• On August 13, 2026, the United States announced it will impose a 100% ad valorem tariff, from September 3, 2026, on security-sensitive unmanned aircraft systems (UAS) and docking stations/critical components exceeding 25 kg or with thermal imaging, and a 25% tariff on smaller UAS without thermal imaging, under Section 232, with preferential 15% or 10% rates for qualifying imports from Japan, Korea, Taiwan, Switzerland, Liechtenstein, the EU, or the UK, and delayed effective dates for less-sensitive components.[69]
• China and Switzerland revealed on August 20, 2026, that talks to update their 2013 free trade pact had wrapped up after five rounds of negotiations. The revised deal would grant duty-free access to the Chinese market for 99.8% of Switzerland's current exports, which is a sharp rise from about half today. It refreshes provisions on rules of origin, trade facilitation, services trade, digital trade, competition, and economic and technical cooperation. Both sides are targeting the signing of the updated agreement before 2026 draws to a close.[70]
• On August 25, 2026, Canada announced it will impose counter-tariffs of 15%, 25%, and 50% on CAD 27.6 billion of US goods from September 8, 2026, covering steel, dairy, appliances, agricultural equipment, pulp and paper, and electronics, on a rate-for-rate basis matching recent US tariffs following the breakdown of bilateral trade talks, alongside a CAD 7.5 billion support package for affected workers and businesses. Existing Canadian counter-tariffs on US automobiles remain in place.[71]