14 October 2025 Global Tax Policy and Controversy Watch | October 2025 edition In today's complex regulatory landscape, strong tax governance is essential for organizations seeking to build trust and ensure compliance. As tax authorities raise expectations, businesses must adapt their governance frameworks to navigate evolving risks effectively. This article explores how robust tax governance not only mitigates risks but also fosters transparency and accountability, ultimately enhancing relationships with stakeholders. On 24 September 2025, the European Commission announced updates to the European Trust and Cooperation Approach (ETECA), set to launch its Second Pilot Phase in January 2026. This initiative aims to enhance tax compliance by fostering transparency and cooperation between multinational enterprises (MNEs) and European Union (EU) tax administrations, focusing on high-level risk assessments of transfer pricing. The pilot will involve 18 EU Member States and is primarily aimed at MNEs with revenues exceeding €750m, though smaller groups may also qualify. Affected entities are encouraged to participate to gain certainty in international operations and potentially lower compliance costs and double taxation risks. In the evolving landscape of tax compliance, businesses face increasing pressures to balance regulatory obligations with cost management. As tax authorities become more sophisticated in their use of AI and data analytics, the risks associated with noncompliance are heightened. On 25 September 2025, President Trump informally announced new tariffs, effective 1 October 2025, including a 100% tariff on branded pharmaceuticals unless production is underway in the US, and tariffs of 50% on kitchen cabinets and 30% on upholstered furniture. Beginning 14 October 2025, a 10% ad valorem duty applies to imports of softwood timber and lumber, while certain upholstered wooden products, kitchen cabinets and vanities face a 25% duty. Beginning 1 January 2026, the duty rate for upholstered wooden products will increase to 30% and duty rate for kitchen cabinets and vanities will increase to 50%. On 6 October, President Trump announced a 25% tariff on all medium- and heavy-duty trucks imported into the US starting November 1. On 26 September, the US Department of Commerce initiated Section 232 investigations into imports of robotics, industrial machinery, personal protective equipment and medical equipment, with a comment period ending on 17 October 2025. On 8 September 2025, the Organisation for Economic Co-operation and Development (OECD) released revisions to the minimum standard under Base Erosion and Profit Shifting (BEPS) Action 5 relating to exchange of information on tax rulings. Following its effectiveness review of the BEPS Action 5 minimum standard, the Inclusive Framework agreed to additions and changes intended to enhance the effectiveness of the standard, including modifications affecting the scope of the rulings covered, new terms of reference and mechanics for peer reviews and revisions to the XML Schema for exchanges. The OECD has released the compilation of reports from the eighth-annual peer review of jurisdictions' implementation of country-by-country reporting (CbCR) requirements. More than 120 jurisdictions have CbCR rules in place and 101 jurisdictions have multilateral or bilateral competent authority agreements for the exchange of such reports. On 26 September 2025, Saudi Arabia's Zakat, Tax and Customs Authority announced the criteria for the 24th wave of Phase 2 e-invoicing integration. Taxpayers in Saudi Arabia with a taxable turnover exceeding SAR 375,000 in 2022, 2023, or 2024 must comply with the Phase 2 e-invoicing requirements by 30 June 2026. On 10 September 2025, Taiwan's Ministry of Finance issued guidelines establishing immediate value-added tax (VAT) obligations for influencers and platforms. The guidelines specify a 5% VAT for foreign platforms and influencers earning income from domestic viewers, though foreign influencers are exempt from VAT registration and filing. This framework aims to improve tax compliance for digital transactions. Affected entities should assess their income sources and transaction types to ensure compliance, utilize the grace period until 30 June 2026, and consult tax advisors to mitigate potential risks. On 3 October 2025, the Turkish Revenue Administration published a Draft General Communique on the Local and Global Minimum Top-Up Corporation Tax, inviting comments until 27 October 2025. This Communique details the application of the Local Minimum Top-Up Tax and Global anti-Base Erosion Information Return requirements for MNE groups with consolidated revenues of €750m or more in at least two of the last four fiscal years. Affected entities should review the draft and consider providing feedback, as the finalized rules will affect compliance starting from fiscal years beginning on or after 1 January 2024.
Document ID: 2025-2074 | ||||
