CFE’s Tax Top 5 – 22 September 2025

BRUSSELS | 22 SEPTEMBER 2025

Pillar Two Developments, DAC Recast & Use of AI in the Profession: Insights from the 2025 CFE Tax Symposium

CFE were delighted to co-host the CFE Tax Symposium 2025: “Taxation in Transition: Compliance, Rights & Innovation in a High-Data World” in Ghent, with our Belgian Member Organisation, the Belgian Institute for Tax Advisors and Accountants (ITAA) last week on 18 September 2025. The Symposium gathered tax professionals, policymakers, academics and business representatives to discuss the impact of recent policy shifts, digitalisation and data-driven processes on compliance, taxpayers’ rights, and innovation in tax administration. The conference was opened by the Presidents of CFE and ITAA, Piergiorgio Valente and Bart van Coile, respectively.

Panel 1 — Pillars One and Two, Side-by-Side System, and Competitiveness Rsks for the EU

Prof. Georg Kofler (Professor of International Tax Law, WU Vienna; Chair, CFE ECJ Task Force) set the scene with a legal and geopolitical overview of the current state of Pillar 2. He highlighted pending legal questions around the EU Minimum Tax Directive—especially property-rights concerns where UTPR might load very large top-ups onto small EU entities of low-taxed foreign-headed groups—and flagged unresolved issues of extraterritoriality, treaty compatibility and the still-shifting interaction between QDMTTs, CFC rules and safe harbours. He cautioned that depending on how “side-by-side” coexistence is drawn up, Pillar Two could either catalyse simplification or trigger a new wave of complexity.

Félicie Bonnet (Head of Global Minimum Tax, OECD) underlined that more than sixty jurisdictions have now legislated Pillar Two—most with QDMTTs, which are fast becoming the cornerstone of the regime. She stressed three near-term priorities at the Inclusive Framework: (1) workable side-by-side parameters that maintain a level playing field; (2) simplifications that let groups rely much more on consolidated accounts and jurisdictional computations as transitional reliefs expire; and (3) proportionate information and filing requirements so administrations get what they need without unnecessary burden on taxpayers. She reminded attendees that Pillar Two is a common approach: even non-adopters agree others may apply it to their groups.

Benjamin Angel (Director, DG TAXUD, European Commission) clarified the EU perspective: that recognition of the U.S. system as “equivalent” under Article 52 is not a viable consideration given design differences (jurisdictional vs global blending, rates, substance carve-outs). Instead, the Commission’s working solution is a safe-harbour-based approach that can fit into the Directive’s dynamic co-existence mechanism. He warned that allowing GILTI push-down would erode Pillar Two’s core achievement—establishing a global minimum as a floor to tax competition—and he counselled against overstating tax as the determinant of FDI, pointing to EU-wide variations in statutory rates that have not dictated investment flows. Aleksandar Ivanovski, Director of CFE, moderator of the panel, highlighted that tax policy is now part of a wider transatlantic discussion on trade policy, competition and enforcement of EU antitrust/State aid law.

Jorge Ferreras Gutiérrez (Deputy Director General of the Spanish Ministry of Finance) explained how Spain legislated Pillar Two under considerable time pressure, reflecting the EU’s commitment to early adoption. Once enacted, such taxes are politically and legally difficult to amend, which complicates adaptation to new OECD/EU guidance. Spain’s position is clear: the EU cannot afford to fall into a less competitive position vis-à-vis the U.S. after significant domestic investment in implementation.

Helen Pahapill (Estonian Ministry of Finance) set out Estonia’s contrasting stance. Estonia opted to delay, citing the Directive’s complexity and the limited relevance to its distribution-based corporate tax system. She described the Directive as a “door” through which OECD rules enter domestic law, raising sovereignty and transparency concerns. With high compliance costs and little expected revenue benefit, Estonia continues to push for simplification as a priority.

In Q&A, Prof. Kofler returned to underline unresolved technical and legal issues: whether QDMTTs could be prioritised over CFC rules, how to treat conditional QDMTTs, the risks of distortions from industrial subsidies and tax credits, and the broader concern that Pillar Two may complicate rather than simplify tax systems. Aleksandar Ivanovski raised the issue of the tax treatment of refundable and non-refundable tax credits, as well as the ability of EU Member states to provide such incentives, which raises not only transatlantic issues, but also issues of different fiscal capacity of Member states in providing such incentives and credits.

Panel 2 — DAC evaluation and the Planned DAC10 Recast: Simplification Without Deregulation

During this panel, Reinhard Biebel (Head of Unit, Direct Tax Policy, DG TAXUD, European Commission) discussed the findings of the evaluation of DAC1–6: the framework is a success, but fragmentation in transposition/implementation, uneven penalties, persistent IT and data-quality challenges (notably taxpayer identification/matching), and limited transparency about how exchanged data are actually used all create avoidable burden.

The Commission’s goal for DAC10 is a single recast that consolidates the nine existing DACs into one coherent instrument, streamlines overlapping obligations (e.g., DAC3/DAC6; DAC4/DAC9 with Pillar Two data; elements touching real-estate income), strengthens guidance to drive consistent application, and explores practical fixes (e.g., standardisation/verification of TINs). Biebel stressed the motto: simplify, not de-regulate.

Raluca Enache (Head of the EU Tax Centre, KPMG) and Philippe Vanclooster (Board Member, ITAA, former Chair of the CFE Professional Affairs Committee) discussed practical compliance issues: duplications between DACs (private/public CbCR, DAC6 vs rulings, and now Pillar Two information returns), divergent XML/reporting schemas by obligation, and especially DAC6 hallmarks without the MBT (e.g., TP-related hallmarks) that pull in many low-risk cases. They argued for clarifying that unimplemented options do not trigger reporting, introducing a de minimis threshold, creating a whitelist of routinely low-risk transactions, and ensuring sequencing so that DAC6 deadlines don’t front-run rulings that will be reported anyway.

The panel also explored the implications of digitalisation and AI. Moderator, Eduardo Gracia Espinar, (Partner, EMEA Ashurst) framed how digitalisation and pre-populated returns are shifting the taxpayer–administration relationship. Speakers cautioned that pre-filled returns should not invert the burden of proof and that GDPR issues in non-EU exchanges remain live.

Panel 3 — Technology, AI and Professional Standards in Tax Practice

This panel explored issues surrounding use of AI by the tax advisory profession. The common thread was that digitalisation can cut cost and improve accuracy, if framed by clear guidance, proportionate expectations, and enforceable human-in-the-loop safeguards.

Nicolas Devillers (Partner, BDO Luxembourg) showed how automation now handles large parts of VAT and indirect tax workflows (data ingestion, anomaly detection, exception-focused review), with “AI as a supervised junior” rather than a black box. Petra Pospíšilová (President, Czech Chamber of Tax Advisers) described the surge in structured reporting (control statements, CESOP, CbCR, soon Pillar Two), arguing tax authorities should provide robust tooling and clear specifications to avoid shifting pure IT burdens to taxpayers.

Jane Mellor (Head of Professional Standards, CIOT, UK) focused on ethics and professional standards: using AI within the PCRT principles (integrity, due care, explainability, confidentiality), updating engagement terms to disclose tooling, and ensuring human oversight—especially where automated systems feed compliance or penalty decisions.

Key Takeaways

The conference was closed by CFE Treasurer Branislav Kováč. Across all three panels, a theme emerged: coordination first, then simplification. Pillar Two will only deliver a level playing field if coexistence respects its core architecture. The DAC10 recast is the right moment to remove overlaps and restore clarity without weakening cooperation. And as AI-driven compliance accelerates, we must balance efficiency with taxpayer rights, transparency and professional judgment.

CFE wishes to thank our excellent moderators and panellists — Georg Kofler, Félicie Bonnet, Benjamin Angel, Jorge Ferreras Gutiérrez, Helen Pahapill, Aleksandar Ivanovski, Reinhard Biebel, Raluca Enache, Philippe Vanclooster, Eduardo Gracia Espinar, Nicolas Devillers, Petra Pospíšilová, Jane Mellor  & Jeremy Woolf—as well as our co-organisers at ITAA and everyone who joined us in Ghent.

OECD to Publish 2025 Peer Review Compilation on Country-by-Country Reporting

On 23 September, the OECD will publish the 2025 Compilation of Peer Review Reports on Country-by-Country Reporting, reviewing implementation of the BEPS Action 13 minimum standard in 141 jurisdictions. The report will cover both domestic legal and administrative frameworks and the exchange of CbC reports between tax authorities.

The compilation notes that most jurisdictions now have legislation in place requiring CbCR for large multinational enterprise groups, with continued improvements in alignment with the minimum standard. More than 3,000 bilateral exchange relationships are now operational, although some gaps and delays in exchanges remain.

The peer review also records that many jurisdictions have taken steps to address deficiencies identified in earlier rounds, but issues persist in relation to the timeliness, completeness and consistent use of reports. The OECD will continue to conduct annual reviews, with particular attention to ensuring that CbCR information is effectively used in risk assessment and transfer pricing enforcement.

FISC Hearing: US Tax Shifts & EU Policy Responses

On 23 September 2025, the European Parliament’s Subcommittee on Tax Matters (FISC) will host a public hearing on the “Tax Implications of the Trump Administration’s Policies”, from 15:45 to 17:00 CEST in Brussels.

Speakers confirmed to participate include Benjamin Angel (DG TAXUD, European Commission), Dr Kimberly Clausing (UCLA), Dr Lúcio Vinhas de Souza (BusinessEurope), and Quentin Parrinello (European Union Tax Observatory). Their contributions will feed into discussions about how U.S. tax policy shifts under the Trump administration might affect EU businesses, particularly around competitiveness, alignment (or lack thereof) with international tax norms like OECD Pillar Two, and possible EU responses.

Although the hearing’s focus is U.S. tax policy, it remains situated in a broader context of FISC’s recent mission activities (including earlier visits to Cyprus) addressing international tax cooperation, anti-abuse rules, and systemic reforms of taxation. The hearing is expected to clarify risks for EU firms, offer comparative perspectives, and possibly lay groundwork for legislative or policy action.

European Commission Call for Evidence on Digital Omnibus Simplification Package

The European Commission has launched a call for evidence on the Digital Omnibus, part of its Digital Package on Simplification. Expected in Q4 2025 as a Directive and a Regulation, the initiative is intended to streamline elements of the EU digital acquis to reduce administrative costs while maintaining the objectives of the existing rules.

The proposals will focus on simplifying the data acquis, including the Data Governance Act, the Free Flow of Non-Personal Data Regulation and the Open Data Directive, which stakeholders have described as fragmented and complex. Other areas for adjustment include rules on cookies and tracking technologies under the ePrivacy Directive, cybersecurity incident reporting obligations, the application of the Artificial Intelligence Act, and aspects of electronic identification and trust services under the European Digital Identity Framework, in view of the forthcoming EU Business Wallet.

The Commission anticipates significant reductions in compliance costs across sectors. The initiative will also feed into a broader Digital Fitness Check to assess the coherence and cumulative effect of EU digital rules. Stakeholders are invited to submit feedback as part of the consultation via Have Your Say.

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. 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, 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.

The selection of the remitted material has been prepared by:
Dr. Aleksandar Ivanovski & Brodie McIntosh