14 May 2026 Global Tax Policy and Controversy Watch | May 2026 edition Global tax policy is reshaping business strategies. Watch a new video of EY Tax Policy leaders discussing volatility, global interconnectedness and why early engagement helps companies stay ahead. This video is part of the 2026 EY Tax Policy and Controversy series. In late March 2026, the United Nations (UN) Committee of Experts in Tax Matters met to consider proposed workplans covering a wide range of topics, including: the UN Model Tax Convention; the UN treaty negotiation manual; transfer pricing; the digitalized and globalized economy; tax administration and artificial intelligence (AI); indirect taxes; and dispute avoidance and resolution. A sequenced work program was created, with identified deliverables and expected reporting dates. Several workstreams are scheduled to return at the next Committee meeting, expected to be held in late October 2026. Join a panel of EY Tax Policy and Controversy leaders from around the world, on 27 May 2026, as they discuss recent developments, with a focus on the Asia Pacific region. Register today! On 16 April 2026, the Organisation for Economic Co-operation and Development (OECD) released its "Secretary-General Tax Report to G20 Finance Ministers and Central Bank Governors," providing an update on its ongoing tax work. The report covers ongoing work on the Global Minimum Tax, taxation of the digital economy, tax certainty, tax transparency, tax administration modernization and capacity building for developing economies. On 10 April 2026, the Australian Treasury released legislation proposing significant changes to Australia's foreign resident capital gains tax regime to clarify and broaden the definition of taxable Australian real property, modify the principal asset test for indirect interests and introduce enhanced notification and withholding integrity measures. Some proposals could apply retrospectively from 2006. If passed, these proposals could affect tax outcomes for a broad range of investments, especially in infrastructure, resources and renewable energy, but also may inadvertently include a range of other sectors. On 30 April 2026, Brazil released regulations for the Tax on Goods and Services (IBS) and Contribution on Goods and Services (CBS), outlining the operational rules for the new consumption tax system. Despite being separate taxes, IBS and CBS share a unified regulatory framework, emphasizing the importance of integrated compliance. Taxpayers are urged to expedite system, process and compliance preparations, with penalties potentially starting in August 2026. On 15 April 2026, Colombia's Constitutional Court announced that temporary tax measures introduced under the 2025 economic emergency were unconstitutional, following the invalidation of the emergency powers in Decree 1390. The court ruled that direct taxes modified or accrued during the decree's effective period (30 December 2025 to 28 January 2026) will not be subject to filing, assessment or collection, and any advance payments will be refundable. Indirect taxes paid during this period may also be refundable to taxpayers who can prove they bore the tax burden, with the tax authority expected to establish refund procedures. The Italian Supreme Court ruled in favor of the Italian Tax Authorities, denying beneficial-owner status to a Danish sub-holding company for Italian-source dividends. The Court identified the US parent company as the true beneficial owner, highlighting that the Danish entity acted merely as a conduit with no control over the dividends, which were transferred via a centralized cash-pooling arrangement. Multinational groups should review their payment procedures to evaluate risks under the dominion test (i.e., whether a recipient can freely dispose of income received rather than being obliged to pass it on to a third party). The Italian Tax Authorities issued guidance on a refund procedure to recover previously non-recoverable value-added tax (VAT) on transaction costs in merger-leveraged buyout transactions. Following a February 2026 clarification, VAT on such costs may be deductible if linked to the taxable activity of the target company. Refund claims must be filed by 9 August 2026, within two years of relevant Supreme Court decisions. On 16 April 2026, the Mauritius Supreme Court overturned the Revenue Tribunal's narrow interpretation of the Foreign Tax Credit Regulations in UPL Corporation Ltd. v. The Revenue Tribunal & Anor. The Court confirmed that the pooling basis allows combining of presumed and actual foreign taxes without extra restrictions, correcting an overly complex reading. Entities should review their foreign tax credits, particularly for periods up to 30 June 2021, and watch for potential appeals by the Mauritius Revenue Authority. On 24 April 2026, Turkiye unveiled the "Strong Investment Hub Program," featuring proposed tax and administrative measures to establish the country as a key investment, export and regional management hub. Key initiatives include enhanced corporate tax exemptions, reduced tax rates for exporters, expanded service export incentives, a special tax regime for relocating individuals and updated asset repatriation rules. These measures await legislative approval and could significantly impact multinational groups and investors.
Document ID: 2026-1072 | ||||
