14 March 2025 Global Tax Policy and Controversy Watch | March 2025 edition Government policies across the world are changing rapidly and, after more than a decade of global tax cooperation, a resurgence of tax competition looms as a possibility. Many jurisdictions are focusing on economic growth and generating more revenue as they prioritize local interests and seek to control deficits. The 2025 EY Global Tax Policy and Controversy Outlook explores changing global tax policies and what businesses need to consider. On 11 February 2025, the European Commission adopted its Work Programme for 2025, outlining key initiatives for the first year of its term. This aligns with the priorities announced in the Competitiveness Compass on 29 January 2025, which will guide new European Union (EU) policies in the coming years, including those related to tax. The first simplification packages planned for 2025 are likely to concentrate on streamlining sustainability reporting rules and amending the Carbon Border Adjustment Mechanism, rather than on direct tax matters. However, additional policy initiatives expected in 2026 and beyond are anticipated to have significant tax implications. Tax and customs administrations have significantly increased their focus on modernizing and optimizing customs audit processes. Central to this shift is the incorporation of advanced technologies such as blockchain and artificial intelligence (AI). An agreement reached between the five political parties expected to constitute a new Belgian federal government contains measures relating to corporate income tax that primarily aim to make the Belgian tax system simpler, more transparent, more user-friendly and fairer. In addition, some measures seek to improve the relationship between taxpayers and the tax administration with a view to enhancing legal certainty and cooperation. The direct tax measures included in the coalition program will in principle apply from 2026 unless indicated otherwise. The French Parliament has approved the Finance Bill for 2025. Changes made in the bill will affect corporations in various ways, including corporate income tax, merger transactions and dividend withholding. The new declaration form is part of the standard corporate income tax return for 2024, due by 19 May 2025 for calendar-year taxpayers. It must be filed by companies that are part of a multinational group subject to country-by-country reporting and/or by entities belonging to a multinational or national group that falls within the scope of the global minimum tax for large groups (Pillar Two). On 4 February 2025, the Peruvian Supreme Court, the highest authority on tax conflict resolution in Peru, published Resolution 2705—02024-LIMA, concluding that consulting services provided via email only qualify as digital services if they are automatic and provided through digital means. The Court's decision contrasts with the Peruvian Tax Authority's latest position on consulting services, which asserts that consulting services qualify as digital services because they are included in the Income Tax Regulations' non-exhaustive list of services that could qualify as digital services. The ZATCA has published advance pricing agreement guidelines to agree, in advance, on transfer pricing methods for related-party transactions. Taxpayers and zakat payers can now apply for unilateral advance pricing agreements to achieve tax certainty for specified zakat years and tax years. On 18 February 2025, Prime Minister and Minister for Finance Lawrence Wong delivered the Budget 2025 Statement in Parliament. Themed "Onward together for a better tomorrow," the 2025 Budget outlines Singapore's strategy to address the challenges of today's uncertain world, which includes various key tax and non-tax measures and changes. To align with certain existing tax regulations, the Ministry of Finance has proposed a draft amendment that extends the application period for tax refunds under income tax treaties to 10 years for taxes already withheld or levied. This amendment, once enacted, will apply to all cases that are still within the five-year period; cases that have already satisfied the five-year reclaim period will not be eligible for the benefits of this extended timeframe. The Ministry of Finance of the United Arab Emirates (UAE) has released a public consultation document on the planned implementation of e-invoicing in the UAE. President Trump signed a memorandum directing the United States Trade Representative to review and consider renewing investigations into Digital Services Taxes levied by US trading partners, specifically targeting France, the United Kingdom, Italy, Spain, Austria, Türkiye and Canada. President Trump signed a memorandum ordering an assessment on whether trade remedies are necessary for reciprocal trade relations with current trading partners. The assessment will be conducted on a country-by-country basis, considering both tariff and non-tariff measures that trading partners impose on the United States.
Document ID: 2025-0690 | ||||
