BRUSSELS | JULY 2025
The European Union and United States this week reached an agreement on tariffs following talks between US President Donald Trump and European Commission President Ursula von der Leyen at Trump’s Turnberry Resort in Scotland. The deal introduces a uniform 15% US tariff on the vast majority of EU exports, including key goods such as cars, pharmaceuticals, and semiconductors. While the agreement ensures continued market access and removes the immediate threat of higher tariffs—up to 30%—it also formalises levies that are considerably higher than previous levels on many EU goods.
In a Statement on the deal, the European Commission has presented the agreement as a stabilising measure that brings predictability to transatlantic trade. EU officials have emphasised that the 15% tariff rate is a ceiling, without scope for stacking or additional duties, and that the deal includes a “zero-for-zero” tariff regime on selected strategic products such as aircraft parts, critical raw materials, certain chemicals, and agricultural goods. However, steel and aluminium were explicitly excluded from the main tariff harmonisation, with the US maintaining higher duties in those sectors and introducing a quota system instead.
In return, the EU has committed to significantly increased purchases of US energy and military equipment. According to US statements, the EU will spend an additional $750 billion on US energy products and invest a further $600 billion in the US economy. Commission President von der Leyen confirmed the bloc would target annual purchases of $250 billion in US energy over the next three years. The agreement also opens the EU market to more US goods at zero tariff, part of what Washington has characterised as a rebalancing of trade relations.
The deal has drawn mixed reactions within Europe. While some leaders, including Germany’s Chancellor Friedrich Merz and Italy’s Prime Minister Giorgia Meloni, welcomed the agreement as a means to avoid economic escalation, industry bodies have expressed concern. Germany’s Federation of Industries described the deal as an “inadequate compromise,” warning that the 15% tariff will negatively impact export-driven sectors. The European Round Table for Industry offered only cautious support, urging the EU and US to swiftly resolve outstanding issues in sectors not yet covered by the agreement.
G20 Meeting Highlights Progress on International Tax Cooperation
The OECD issued a Tax Report to G20 Finance Ministers ahead of the meeting held in July in South Africa, outlining key developments in international tax co-operation. The report highlights continued progress in the implementation of the BEPS minimum standards, advances on the Two-Pillar Solution, and significant gains in tax transparency. It also covers outcomes of the April Inclusive Framework Plenary, where members endorsed simplification efforts, agreed new workstreams on tax and inequality, and commenced a diagnostic phase on global mobility. The OECD also reported on capacity-building initiatives, especially for developing countries, and transmitted a stocktake of international transparency efforts since the inception of the G20.
The G20 Communiqué, issued at the conclusion of the Durban meeting held from 17 to 18 July, reaffirms collective support for stabilising the international tax system and advancing inclusive tax policy reform. Members acknowledged ongoing negotiations within the OECD/G20 Inclusive Framework to address the tax challenges of the digitalised economy, and agreed to continue constructive engagement on Pillar Two global minimum taxes, with the shared aim of finding a balanced and practical solution. G20 members welcomed the tax transparency progress report and looked ahead to further reports expected later in the year on BEPS implementation, simplification of tax rules, and the voluntary exchange of real estate ownership information.
Implementation of Pillar One and Pillar Two continues to gain traction. On Pillar One, members of the Inclusive Framework are negotiating the implementation of Amount A, aimed at reallocating taxing rights on residual profits of large multinationals. Several countries have already adopted Amount B, a simplified elective transfer pricing mechanism. Under Pillar Two, more than 55 jurisdictions have implemented or committed to the GloBE Rules or equivalent minimum taxes, while efforts are underway to develop simplified safe harbours and effective tax rate calculations for high-tax jurisdictions. Members also discussed a potential side-by-side arrangement to defuse concerns raised by proposed US retaliatory tax measures.
The OECD and G20 also placed strong emphasis on supporting developing countries, with the Global Forum now counting 172 members, including 69 jurisdictions committed to the Crypto-Asset Reporting Framework. In 2024 alone, tax transparency efforts helped developing countries raise more than EUR 2.4 billion in additional revenue. These developments align with the broader G20 agenda of enhancing domestic revenue mobilisation and strengthening international capacity-building frameworks, as well as supporting the inclusion of developing countries in global tax decision-making
Registration Now Open: 2025 CFE Tax Symposium in Ghent on 18 September 2025
Registration is now open for the 2025 CFE Tax Symposium, taking place on Thursday, 18 September 2025 in Ghent, Belgium. Hosted in collaboration with the Belgian Institute for Tax Advisors and Accountants (ITAA), this year’s symposium will explore the theme of “Taxation in Transition: Compliance, Rights & Innovation in a High-Data World.” The event will bring together policymakers, academics, and leading tax professionals to examine the practical impact of major developments in international and EU tax policy.
The conference will open with welcome remarks from CFE President Piergiorgio Valente and ITAA President Bart Van Coile, followed by a keynote address from Filip Van de Velde, Head of the Belgian Tax Administration. The morning panel will set the scene with a discussion on the evolving EU and international tax policy landscape, including implementation of the OECD Pillar Two (GloBE) regime and emerging cross-border tax trends. Speakers will include representatives from the OECD, the Spanish and Estonian Ministries of Finance, and Prof. Georg Kofler.
In the afternoon, a second panel will focus on the recast of the Directive on Administrative Cooperation (DAC), taxpayer rights, and issues such as proportionality of sanctions and the legal status of pre-populated return systems. The final panel will examine the growing role of AI and technology in tax compliance, including real-time VAT reporting (MOSS/IOSS), secure IT architecture, and the ethical use of taxpayer data in digital systems. Contributions will come from senior tax officials, academics, and expert members of the CFE Technical Committees.
Save the date and secure your place! More information and registration is available here.
OECD Releases Second Batch of 2025 Transfer Pricing Country Profiles
The OECD published a second batch of updated transfer pricing country profiles for 2025 in July, covering 12 jurisdictions: Austria, Belgium, Canada, Ireland, Latvia, Lithuania, Mexico, the Netherlands, New Zealand, Singapore, South Africa, and Spain. The updates reflect current transfer pricing rules and administrative practices and now incorporate country-specific treatment of hard-to-value intangibles (HTVIs) and the simplified and streamlined approach for baseline marketing and distribution activities.
This release expands the scope of the OECD’s profiles to address new elements linked to ongoing work on Amount B under the Two-Pillar Solution to the tax challenges of digitalisation. The information presented was supplied by the respective jurisdictions in response to a detailed OECD questionnaire, aimed at ensuring consistency and accuracy in reflecting domestic legislation and implementation.
With this release, the total number of jurisdictions with transfer pricing country profiles has reached 78. The profiles remain structured around core topics, including the arm’s length principle, transfer pricing methods, comparability analysis, treatment of intangibles and intra-group services, cost contribution arrangements, documentation requirements, dispute resolution mechanisms, and safe harbour regimes.
First published in 2009, the OECD’s transfer pricing profiles have been progressively expanded and revised, particularly following the 2015 BEPS Actions 8-10 and Action 13. Subsequent updates in 2017 and 2021 broadened the profiles’ coverage to non-OECD members and introduced sections on financial transactions and permanent establishments. The 2025 updates continue this trend by integrating elements reflecting emerging consensus areas in global transfer pricing reform.
EU Commission Launches Consultation on Reform of EU VAT Rules for Travel & Tourism
In July, the European Commission has launched a public consultation as part of its ongoing evaluation and impact assessment of VAT rules applicable to the travel and tourism sector. The initiative targets two key components: the special VAT scheme for travel agents (TOMS) and the VAT treatment of passenger transport. The Commission notes that existing rules are outdated and inconsistently applied across Member States, creating distortions in the single market and undermining competitiveness for EU-based businesses. The consultation will inform a possible legislative proposal expected in Q4 2026.
The TOMS scheme has been highlighted as a particular area of concern by the EU Commission in the consultation. The current application allows non-EU travel agents to sell EU travel services without taxation on their margins, leading to estimated competitive advantages of 2–4% on final prices. Intra-EU discrepancies in the VAT treatment of B2B transactions and inconsistent national applications of the scheme further exacerbate distortions. Potential reforms include revising the place of taxation, narrowing or redefining the scope of TOMS, introducing a global margin calculation, and offering more flexibility for B2B transactions.
Passenger transport VAT rules have also come under scrutiny, particularly the current system of taxing services in proportion to distances travelled across borders. This has resulted in complex administrative burdens for SMEs, especially in the land transport sector, where VAT registration and compliance costs can be substantial. The widespread application of reduced or zero VAT rates—especially in air and maritime transport—raises concerns over competitive neutrality and environmental coherence. Policy options being considered include aligning VAT rules across transport modes and revisiting the place of supply rules.
The consultation will run until 16 October 2025, and input from stakeholders, can be submitted via the Have Your Say webpage portal. Responses will feed into both the final impact assessment and legislative design. A summary of the consultation results will be published in due course.
OECD Publishes 2024 Tax & Development Report
The OECD published its 2024 Tax and Development Report in July, outlining key achievements and future priorities in supporting developing countries to strengthen their tax systems. The report highlights the OECD’s work in aiding partner countries tackle tax evasion and avoidance, boost domestic revenue mobilisation, and advance reforms in tax policy and administration. Through its tax and development programme, the OECD facilitates participation in international tax initiatives such as the Inclusive Framework on BEPS and the Global Forum on Transparency and Exchange of Information for Tax Purposes, while also delivering tailored technical assistance and policy-relevant data.
According to the report, 2024 marked a record year for the launch of new programmes under the OECD/UNDP Tax Inspectors Without Borders initiative, alongside expanded support in tax transparency and exchange of information. The OECD also continued its role in providing internationally comparable data and targeted capacity building across a broad range of tax areas. These efforts reflect increasing engagement from developing countries in global tax matters and underscore the OECD’s commitment to inclusive international cooperation.
The publication also summarises the findings of a recently concluded independent evaluation of the OECD’s tax and development work, including its initial responses to key recommendations. Emphasis is placed on strengthening country ownership, enhancing collaboration with other stakeholders, and improving the visibility and impact of its programmes. Looking ahead, the OECD sets out priorities for 2025, with a continued focus on inclusive participation, technical support, and the delivery of sustainable tax system reforms.
Belgian Constitutional Court Refers Question on Validity of UTPR in EU Pillar 2 Directive to CJEU for Preliminary Ruling
The Belgian Constitutional Court has referred a question to the Court of Justice of the European Union for a preliminary ruling in a case challenging Articles 35 and 36 of the Belgian Law of 19 December 2023, which implements the OECD Pillar Two UTPR, in accordance with EU Directive 2022/2523. These provisions require Belgian entities of multinational groups to pay additional taxes on under-taxed income generated by affiliated companies in third countries that do not apply a qualified Income Inclusion Rule (IIR).
The applicant, a U.S.-based business organisation, argued that this mechanism violates fundamental rights and principles protected under Belgian constitutional law and EU law. In particular, they assert the law breaches the principles of equality and non-discrimination, legal certainty, the right to property, freedom to conduct a business, and the territoriality principle in taxation—on the basis that Belgian companies may be taxed on foreign income with no connection to their own activities or financial capacity.
Given that the Belgian law transposes EU Directive 2022/2523, the Court has referred a preliminary question to the Court of Justice of the European Union. It asks whether Articles 12 to 14 of the Directive—which mandate the application of the top-up tax to EU-based entities in the above circumstances—are compatible with Articles 15–17, 20 and 21 of the EU Charter of Fundamental Rights, Articles 49 and 56 TFEU, the principle of legal certainty, and the principle of tax territoriality. The Belgian Court will await the CJEU’s judgment before ruling on the validity of the contested national provisions.
Inspectors Without Borders Releases Annual Report Highlighting Decade of Tax Capacity Building in Developing Countries
The OECD and United Nations Development Programme announced a major expansion of their flagship Tax Inspectors Without Borders programme, unveiling the so-called ‘TIWB 2.0’ at the Fourth International Conference on Financing for Development held in Seville last week. The announcement coincided with the release of the “Ten Years of Hands-on Assistance in Developing Countries” 2025 Annual Report, which highlights how the initiative has helped 70 developing jurisdictions raise over USD 2.4 billion in additional tax revenues – with USD 1.91 billion mobilised in Africa alone. The initiative will continue with the approach of embedding experienced tax experts within domestic audit teams to tackle complex challenges including transfer pricing, base erosion, and profit shifting.
TIWB 2.0 will deepen commitments to tailored assistance and institutional strengthening, while expanding into areas such as the taxation of the digital economy, auditing VAT on digital trade, and implementing global minimum tax rules. The programme’s integration with the United Nations Development Programme’s broader development architecture aims to ensure that these technical interventions translate into sustainable institutional reforms and stronger domestic resource mobilisation aligned with the Sustainable Development Goals.
The OECD Secretary-General Mathias Cormann noted that TIWB 2.0 will remain country-led and responsive to jurisdiction-specific needs, while Haoliang Xu of the United Nations Development Programme emphasised that fair and efficient tax systems are central to building trust, sustainability, and inclusive development. With renewed donor support and expanded partnerships – including with the African Tax Administration Forum, the OECD Forum on Tax Administration, and others – TIWB 2.0 aims to scale its operations and strengthen the global tax capacity-building landscape in the years ahead.
EU AML Authority Sets Out Priorities as Operational Phase Begins
The Anti-Money Laundering Authority (AMLA) has published its inaugural Work Programme for 2025, marking the transition from institutional set-up to early operational activities following its formal establishment in Frankfurt earlier this year. With its Chair and Executive Board now in place, AMLA is moving to deliver on its dual mandate of anti-money laundering (AML) and counter-terrorist financing (CFT) supervision, as well as support and coordination of Financial Intelligence Units (FIUs) across the EU. The programme outlines both the achievements of the first half of 2025—focused on governance, staffing, and infrastructure—and the priorities for the remainder of the year.
Key deliverables for the operational phase for 2025 include the early development of the Single Rulebook, the preparation of harmonised supervisory practices, and the design of frameworks to facilitate information exchange between FIUs. Significant effort is being directed toward addressing high-risk sectors, with crypto-asset service providers (CASPs) singled out for early supervisory focus. AMLA also plans to address supervisory fragmentation by fostering convergence in national approaches, particularly in the non-financial sector where regulatory harmonisation remains limited.
By the end of 2025, AMLA expects to deliver preparatory work on several mandates, with a view to full implementation from 2026 onwards. This includes risk assessment methodologies, internal controls guidance, and supervisory cooperation protocols. Two Single Programming Documents (2026–2028 and 2027–2029) are due to be developed in parallel, providing the initial strategic and operational roadmap for the Authority. Engagement with EU institutions, Member States, and stakeholders will underpin this process, which aims to articulate AMLA’s long-term vision and performance metrics.
OECD Recommendations to Reduce Burden in Complying with BEPS Minimum Standards
The OECD Inclusive Framework has endorsed a series of recommendations aimed at recognising progress and reducing burdens in the implementation of the BEPS minimum standards. Since the BEPS Project’s launch in 2013, implementation of its four minimum standards – covering harmful tax practices (Action 5), tax treaty abuse (Action 6), Country-by-Country reporting (Action 13), and mutual agreement procedures (Action 14) – has reached a mature stage, with over 145 jurisdictions committed to addressing BEPS risks. The focus is now shifting towards ensuring developing countries can fully benefit from these standards, alongside efforts to streamline peer review processes and reduce administrative burdens.
At its April 2025 Plenary meeting, the Inclusive Framework agreed to streamline Action 5 peer reviews on harmful tax practices by introducing upfront economic impact assessments to determine whether legislative reviews are necessary, reducing the frequency of monitoring from annual to three-year cycles. For Action 6 on tax treaty abuse, with over 90% of agreements now compliant or on track, the peer review cycle has been extended to once every five years, maintaining targeted technical assistance where required.
For Action 13 on Country-by-Country reporting, efforts are being focused on enabling developing countries to effectively access and use reports, including exploring low or no-cost IT solutions to overcome technological barriers. The Inclusive Framework also agreed no procedural changes are currently required for Action 14 on mutual agreement procedures, which continues to improve treaty dispute resolution efficiency, with developing countries now more engaged in the peer review process to strengthen their MAP frameworks.
Overall, these measures are intended to optimise resource allocation among jurisdictions, preserve the integrity of the BEPS minimum standards, and ensure a level playing field. A comprehensive report taking stock of BEPS implementation to date is expected in late 2025, with continued capacity-building programmes supporting developing countries to derive full benefits from the international tax framework reforms.
Aleksandar Ivanovski & Brodie McIntosh