BRUSSELS | AUGUST 2025
The United Nations hosted two Sessions in August 2025 at its Headquarters in New York, advancing work on the proposed UN Framework Convention on International Tax Cooperation. The sessions brought together representatives from over 100 Member States to deliberate on the Convention’s core provisions and two accompanying protocols.
The first session, held from 4 to 8 August, focused on Workstream 1, addressing the main elements of the Convention, including dispute prevention and resolution, capacity building, technical assistance, and governance structures. Discussions explored the potential establishment of a Conference of Parties and measures to enhance mutual administrative assistance and information exchange. Delegates also considered how the Convention’s commitments would interact with the proposed protocols—on taxation of the digital economy and dispute resolution—and align with existing international frameworks.
Positions during the first week largely reflected longstanding divergences. Developing countries, particularly those in the Africa Group, reiterated their commitment to the Terms of Reference and advocated for binding and equitable outcomes. In contrast, many EU and OECD members expressed caution, favouring more flexible or optional provisions to accommodate national policy space. Civil society representatives contributed perspectives on issues such as taxation of high-net-worth individuals, environmental tax measures, and the need for international tax rules to support sustainable development. Debates emerged around the scope of cross-border service taxation, the barriers to effective dispute resolution, and whether obligations under the Convention should be high-level and indicative or more targeted and prescriptive. Some participants stressed the importance of adaptability to national capacity and economic conditions, while others pushed for clearer, enforceable commitments. While no final decisions were taken, the first session set the stage for more detailed technical discussions in the second week.
From 11 to 15 August, the second session turned to the two draft protocols: Protocol I on the taxation of cross-border services in a digitalised economy, and Protocol II on dispute prevention and resolution. Protocol I discussions centred on modernising outdated nexus rules by introducing the concept of significant economic presence and assessing whether taxation should be based on net or gross income. Delegates considered differentiated approaches for various types of services, debated the continued relevance of physical presence as a threshold, and discussed whether low-margin services warranted special treatment. The definition of “income” for the purposes of the Convention was another point of contention. Some delegations proposed developing a “fast-track” mechanism—similar to the OECD’s Multilateral Instrument—to enable swifter implementation of protocol provisions, though questions were raised about its feasibility and interaction with a still-evolving Convention framework. Delegates also explored provisions on information exchange, including whether countries collect sufficient data on cross-border services and whether such mechanisms should be housed in the core Convention or in the protocols themselves.
In parallel, Protocol II discussions examined possible mechanisms for dispute prevention and resolution. The Secretariat outlined options with opt-in and opt-out features, noting pressure points such as transfer pricing, permanent establishments, and taxation of digital services. While OECD countries pointed to regional tools, including arbitration, as potential models, several African and Latin American countries voiced concerns about binding arbitration, citing sovereignty and constitutional limitations. These countries instead advocated for more flexible and universally accessible approaches.
Civil society, led by organisations such as the Global Alliance for Tax Justice, reiterated their call for structural reform of the international tax system. They emphasised the importance of curbing profit shifting, tackling inequalities, and ensuring tax systems support sustainable development, gender equality, and climate goals. While divisions remain, the second session closed with broad recognition of the central role of both protocols in shaping the future Convention. Negotiations will continue at the next session scheduled for November 2025 in Nairobi.
EU Commission Begins Evaluation of Foreign Subsidies Regulation
The European Commission has launched the first review of the Foreign Subsidies Regulation (FSR), which has been in place since July 2023. The review process will begin with a public consultation and a call for evidence, inviting stakeholders to contribute views on both specific aspects of the FSR’s implementation and broader reflections on its aims and context until 18 November 2025 via the Commission’s “Have your say” portal.
The review will assess several key areas: how foreign subsidies that distort the internal market are being identified and addressed; the application of the balancing test, which weighs potential benefits of subsidies against their distortive effects; the Commission’s power to initiate reviews of subsidies independently; the adequacy of notification thresholds; and the overall complexity and cost of the regime for businesses. The findings will feed into a report to be presented to the European Parliament and the Council in July 2026, which may be accompanied by legislative proposals.
In a press release concerning the review, Commission representatives underlined that the review is intended both to ensure the FSR remains effective in addressing distortions caused by foreign subsidies and to minimise administrative burden. Public procurement, which represents around 15% of the EU’s GDP, was highlighted as a particular area where fairness and transparency are crucial. The consultation is positioned as an opportunity for stakeholders to raise concerns over rule complexity, compliance costs and potential avenues for simplification.
The FSR was introduced to safeguard competition within the EU by tackling distortions caused by non-EU subsidies, while keeping markets open to trade and investment. Its mechanisms apply across all sectors and economic activities, including acquisitions, public procurement and direct investment. The current review is the first in a three-year cycle of evaluations mandated under the Regulation.
US Executive Order on Revisions to the Reciprocal Tariff Regime
On 31 July 2025, President Trump signed an Executive Order revising the “reciprocal tariff” framework first introduced on 2 April under Executive Order 14257. The earlier measures had imposed a 10% baseline tariff on all trading partners from 5 April, with higher country specific rates due to take effect from 9 April. The latest order extends the pauses on those elevated rates, originally set to begin on 9 July, pushing their implementation to 1 August and adjusts rates for selected countries based on the progress of bilateral negotiations.
Under the revised framework, countries not listed in Annex I of the Order revert to the 10% default rate, while Annex I countries face revised tariffs ranging generally between 25% and 50%, depending on trade deficit status and negotiation outcomes. Notably, Switzerland is subject to a 39% tariff, significantly higher than earlier estimates; India and Taiwan face duties of 25% and 20% respectively; Brazil is subject to a combined 50% tariff (including a country‑specific surcharge); and Canada’s rate is set at 35%.
The order emphasises that tariff rates can be modified downward for trading partners that demonstrate meaningful engagement, or upward in the case of retaliation or insufficient reforms. It also reiterates that the tariffs are justified under the International Emergency Economic Powers Act (IEEPA), citing the national security threat posed by the US trade deficit and non‑reciprocal trade practices.
The announcement has prompted mixed responses. EU officials reaffirmed that key exports—such as car parts—are not yet covered by reduced rates, while Switzerland signalled willingness to submit a “more attractive offer” to avoid the high duty. In parallel, the EU has agreed to suspend retaliatory tariffs on U.S. steel, aluminium and autos for six months, pending further clarification and negotiation with Washington.
2025 CFE Tax Symposium | Ghent | 18 September 2025
The 2025 CFE Tax Symposium will take place on Thursday, 18 September 2025, at the historic Oude Vismijn in Ghent, Belgium. Hosted in partnership with the Institute for Tax Advisors and Accountants Belgium, this year’s symposium, “Taxation in Transition: Compliance, Rights & Innovation in a High-Data World”, will convene policymakers, academics, and leading practitioners to examine the practical impact of the latest EU and international tax policy developments.
The morning’s first panel will examine the EU & international tax policy landscape, moderated by CFE Director Aleksandar Ivanovski. Speakers will include Benjamin Angel (European Commission), Felicie Bonnet (OECD), Jorge Ferreras Guiterrez (Ministry of Finance, Spain), Helen Pahapill (Ministry of Finance, Estonia), and Prof. Dr. Georg Kofler (WU Vienna). They will discuss OECD Pillar Two implementation, EU simplification efforts, and broader cross-border trends.
After a networking lunch, the focus will turn to DAC and Taxpayers’ Rights, in a panel moderated by Eduardo Gracia Espinar (Ashurst EMEA, Spain) with panelists Reinhard Biebel (European Commission), Raluca Enache (EU Tax Centre, KPMG), and Philippe Vanclooster (ITAA), examining DAC recast, proportionality of sanctions, taxpayer rights, and the use of pre-populated tax returns.
The final panel on the interplay of AI, tax technology & indirect tax, chaired by Jeremy Woolf (Pump Court, UK), will bring together Jane Mellor (CIOT, UK), Nicholas Devillers (BDO, Luxembourg), and Petra Pospíšilová (Czech Chamber of Tax Advisers) to discuss AI-enabled compliance tools, real-time VAT reporting (MOSS, IOSS, VIDA), secure IT architecture, and ethical data use.
Secure your place at the conference and register now! More information and registration is available here.
14 Jurisdictions Sign OECD MCAA on GLOBE Information Exchange
On 6 August 2025, the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting (BEPS) published the current list of signatories to the Multilateral Competent Authority Agreement on the Exchange of GloBE Information (GIR MCAA), part of Pillar Two of the Inclusive Framework’s Two-Pillar Solution. The agreement provides a framework for the automatic exchange of information between tax administrations to support the application of the Global Anti-Base Erosion (GloBE) Rules.
The 14 signatories are Austria, Belgium, Denmark, France, Ireland, Italy, Japan, Korea, Luxembourg, New Zealand, Portugal, the Slovak Republic, Spain and the United Kingdom, with signature dates ranging from 11 June to 9 July 2025. By joining the GIR MCAA, these jurisdictions commit to automatically sharing specified data on the GloBE outcomes of large multinational enterprise (MNE) groups operating within their territories.
The exchange of GloBE information is intended to enhance transparency and reduce opportunities for profit shifting or base erosion by ensuring that minimum effective tax rates are met across jurisdictions. The GIR MCAA complements existing transparency measures, such as Country-by-Country Reporting, and additional signatories are expected in due course.
Upcoming FISC Activities: Transatlantic Tax Issues & Mission on OECD Reform
The The European Parliament’s Subcommittee on Tax Matters (FISC) will hold a public hearing on 23 September 2025 to examine the “Tax implications of the Trump administration’s policies”. The session, taking place in Brussels from 15:45 to 17:00, will review recent shifts in U.S. tax policy under the Trump II administration and their potential impact on European businesses and the wider international tax landscape.
The hearing will centre on the implications of U.S. measures for the competitiveness of EU companies, particularly in light of global frameworks such as the OECD’s Pillar Two rules and the possible use of digital services taxes (DSTs) in the EU. Experts will also assess the broader consequences for international tax cooperation and consider potential EU-level policy responses designed to safeguard European interests.
In advance of the hearing, members of the FISC Subcommittee will undertake a delegation visit to Nicosia, Cyprus, from 15 to 17 September. Led by Chair Pasquale Tridico, the delegation will meet with representatives of government, parliament, private sector stakeholders, and civil society to discuss pressing international tax challenges. The agenda includes the implementation of the OECD two-pillar reform, exchange of tax information and anti-tax abuse measures, simplification of tax systems, competitiveness strategies, and the role of tax incentives and energy taxation.
OECD Issues XML Schemas for Global Minimum Tax & Crypto-Asset Reporting
The OECD published new XML Schemas and accompanying user guidance to facilitate the automatic exchange of information under the Global Minimum Tax (GMT) regime and the Crypto-Asset Reporting Framework (CARF).
In relation to Pillar Two, the OECD released the GloBE Information Return (GIR) Status Message XML Schema. This schema enables Competent Authorities to confirm whether GIR files received through the GloBE reporting system comply with agreed validation rules. The document includes the technical structure of the XML schema, user instructions, and the specific validation criteria for detecting file or record-level errors. This tool aims to support data quality in the exchange of GIR information as jurisdictions operationalise the Global Minimum Tax.
For crypto-asset reporting, the OECD published an updated version of the CARF XML Schema, incorporating technical revisions to support automatic exchanges of information under the framework endorsed in 2023. This update refines the schema approved in 2024 and includes clarifications relevant to both cross-border and, where applicable, domestic reporting obligations of Crypto-Asset Service Providers.
Additionally, the OECD has issued a new set of frequently asked questions addressing interpretative aspects of the CARF and the amended Common Reporting Standard (CRS). The FAQs are intended to support consistent and effective implementation across jurisdictions, offering further clarity on administrative and compliance issues associated with both standards.
CJEU Ruling in Banca Mediolanum on Taxation of Cross-Border Dividends
On 1 August 2025, the Court of Justice of the European Union delivered its judgment in Joined Cases C-92/24 to C-94/24, Banca Mediolanum. The decision concerns the compatibility of Italian legislation with Council Directive 2011/96/EU, the Parent-Subsidiary Directive, in relation to the taxation of dividends received by financial intermediaries from subsidiaries established in other EU Member States. In the tax years 2014 and 2015, Banca Mediolanum, resident in Italy, received such dividends, which were subject to Italian corporate income tax on up to 5% of their amount. Additionally, Italian law required that 50% of these dividends be included in the tax base for the regional tax on production activities applicable to financial intermediaries.
Banca Mediolanum sought reimbursement of the regional tax on production activities component, arguing that the relevant legislative provision conflicted with the Directive. The Italian tax authority rejected the claim, asserting that the rule complied with EU law. The Italian court referred the matter to the CJEU, seeking clarification on the scope of the exemption system under the Directive. The Court held that the Directive allows Member States to choose between an exemption or an imputation system for avoiding double taxation on cross-border profit distributions, with Italy applying the exemption system.
The CJEU further held that, under the exemption system, Member States must refrain from taxing profits distributed by subsidiaries resident in other Member States to their parent companies beyond the 5% threshold permitted by the Directive. This prohibition applies regardless of whether the tax in question is corporate income tax or another form of tax that includes such dividends in its assessment base. The Court found that requiring 50% of the dividends to be included in the base effectively amounted to taxing more than 5% of the distributed profits, contrary to the Directive’s aim of preventing economic double taxation.
The judgment confirms that, where the exemption system has been chosen, national legislation may not impose tax on more than 5% of such dividends, even if the taxation occurs through a levy that is not corporate income tax. The decision is binding on the referring court and will guide other national courts in similar disputes.
Irish Tax Institute & Harvard Centre for International Development Global Tax Policy Conference: 23 & 24 October 2025
The 5th Global Tax Policy Conference, co-hosted by the Irish Tax Institute and the Harvard Center for International Development, will take place on 23–24 October 2025 in Dublin and is open for registration. This flagship event brings together a distinguished international lineup of policymakers, tax administration leaders, academics, and industry practitioners to examine the evolving landscape of global tax policy. The conference will open with a keynote address by Ireland’s Minister for Finance and Eurogroup President, Paschal Donohoe TD, setting the tone for two days of high-level dialogue.
Day one will feature sessions on the current state and future trajectory of global tax reform, with contributions from senior figures at the OECD, European Commission, and IRS. Discussions will explore the challenges of implementing complex global tax rules, the growing burden of corporate tax compliance, and the feasibility of a harmonised approach to dispute resolution. Speakers include Manal Corwin (OECD), Gerassimos Thomas (DG TAXUD), Danny Werfel (former IRS Commissioner), and representatives from the IMF, United Nations, and Tax Justice Network.
The second day will focus on the tax implications of global mobility and remote work, with a session dedicated to how tax systems can respond to digitalised forms of labour. Another panel will address how tax policy can support environmental and climate goals. The closing session, chaired by Harvard’s Jay Rosengard, will consider what the future of global taxation might look like, with emphasis on achieving consistency and certainty across jurisdictions. Across both days, the programme balances technical insight with practical implementation challenges, and offers a valuable opportunity for stakeholders to engage with emerging international tax dynamics.
More information and registration is available here.
EU Commission Publishes 2025 eInvoicing Country Factsheets with B2B Updates
The European Commission has released the 2025 edition of the eInvoicing Country Factsheets, providing an updated overview of national developments in electronic invoicing across the EU and selected EEA countries. Designed to support transparency and interoperability, the factsheets compile information on the legal frameworks, technical models, and monitoring systems in place across the 27 EU Member States and additional countries Norway, Iceland and Liechtenstein. This year’s edition also includes, for the first time, dedicated coverage of B2B eInvoicing developments, reflecting the growing scope of digital invoicing policy under the EU’s VAT in the Digital Age initiative.
Originally focused on Business-to-Government transactions following the 2014 eInvoicing Directive, EU policy has required public administrations since April 2020 to accept electronic invoices in compliance with the European Standard for contracts above the public procurement thresholds. The factsheets provide updates on how each jurisdiction has implemented these requirements and how their frameworks are adapting in anticipation of broader eInvoicing obligations under ViDA.
Each factsheet includes details on B2G, B2B, and B2C invoicing, national policy approaches, the use of Core Invoicing Usage Specifications (CIUS), and any real-time VAT reporting mechanisms in place. To ensure reliability, country representatives are invited to verify the factsheets, with a verification status indicated accordingly. Where verification is pending, the Commission notes that all entries are compiled with care to ensure accuracy and relevance.
Aleksandar Ivanovski & Brodie McIntosh