December 4, 2023



Global Adoption and Implementation of BEPS Standards

Countries worldwide are aligning with the OECD’s Base Erosion and Profit Shifting (BEPS) initiatives, focusing on preventing tax avoidance and ensuring profits are taxed where economic activities occur.

  • UAE: Amended its Corporate Tax Law, paving the way to the Pillar 2 framework/ setting a global minimum corporate tax rate.

  • Norway and Slovenia: Proposed a draft bill for Pillar 2, reflecting a commitment to global minimum tax standards.

  • Kuwait: Joined the OECD/G20 BEPS framework, signaling an openness to global tax cooperation.

  • Switzerland: Is considering delaying Pillar 2’s implementation

  • Vietnam: Approved a top-up tax for multinational companies, aligning with global tax fairness initiatives.

Increased Efforts in Digital and E-commerce Taxation

Nations are intensifying efforts to tax the digital economy, focusing on VAT/GST for digital services and reporting requirements for e-commerce transactions.

  • Mexico: Updated its VAT registration list for digital service providers, now covering 198 companies, to ensure VAT compliance for digital services.

  • European Union: Introduced new guidelines to fight VAT fraud in e-commerce, targeting the rapidly expanding digital market.

  • Italy: The DAC7 requirements signify a move towards greater transparency and reporting in the digital economy.

  • Canada: Proposed a digital services tax, reflecting a growing global trend to tax digital giants more effectively.

Domestic Tax Reforms and Adjustments

Many countries are revising their domestic tax laws to adapt to economic changes, address specific sectors, and streamline tax processes.

  • Turkey: Eliminated the VAT deduction right on imports, focusing on protecting domestic industries.

  • Ukraine: Introduced a windfall tax for banks, reflecting efforts to address economic challenges and redistribute wealth.

  • Hungary: Approved new tax legislation, addressing non-cooperative jurisdictions and other tax policy areas.

  • Greece: Implemented public CbC reporting, increasing transparency in corporate tax reporting.

Sector-Specific and Social Security Taxation

Some countries are focusing on sector-specific tax incentives and updating social security agreements to reflect changing labor and economic patterns.

  • Albania-Moldova: Discussions on a social security agreement reflect evolving labor mobility and social protection needs.

  • Malaysia: Provided tax incentives for food production projects, demonstrating a focus on specific sectors for economic growth.

  • Kosovo-Netherlands: Approval of a social security agreement indicates increased attention to worker rights and mobility.

Tax Treaty Developments and Cross-Border Taxation

Countries are actively negotiating and updating tax treaties to enhance cross-border tax cooperation and prevent tax evasion.

  • Switzerland-Slovenia: Adopted a protocol to include BEPS measures in their tax treaty, focusing on preventing treaty abuse and hybrid mismatch arrangements.

  • Germany-Austria: Amended their tax treaty, integrating BEPS measures to prevent tax evasion and improve dispute resolution.

  • Indonesia-Bulgaria-Mexico-South Africa-Vietnam: Completed procedures for the BEPS MLI, extending its application to four more treaties.

  • Romania-Liechtenstein: Approved their first tax treaty, paving the way for improved economic relations and tax cooperation.

  • Estonia-Pakistan: Signed their first income tax treaty, indicating a step towards stronger bilateral tax and economic ties.

  • Paraguay-Spain: The Senate’s approval of their first tax treaty indicates a commitment to fostering cross-border tax cooperation.

  • Denmark-Algeria: The approval of their first tax treaty shows a new phase in bilateral tax relations and cooperation.

  • Andorra-Italy: Preparation to sign their first income tax treaty marks a significant step in their bilateral tax relations.

  • Moldova-Netherlands: Amended their tax treaty, incorporating international standards and preventing double taxation.

  • Germany-Luxembourg: Approved a protocol amending their tax treaty, focusing on cross-border workers and anti-abuse measures.