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Building on years of international efforts to adapt tax rules to an increasingly digitalised economy, the OECD/G20 Inclusive Framework has reshaped the global tax landscape through its two pillar solution.

As part hereof, the OECD/ Inclusive Framework released the Pillar Two Rules at the end of December 2021, resulting in a 15% minimum tax rate for in-scope (multinational) groups in all jurisdictions where they have presence as early as of financial years 2024. These rules are by now introduced in many jurisdictions, imposing a global minimum tax and significantly expanding compliance and reporting obligations for (multinational) groups.

While the OECD has finalised the technical framework for Pillar One, implementation of Amount A remains uncertain due to the absence of global consensus. Amount B, by contrast, is incorporated in the OECD Transfer Pricing Guidelines and can be applied by jurisdictions to determine a return on sales for in-scope distributors.

In recent years tax authorities have placed more emphasis on combatting the use of abusive and aggressive tax structures by companies operating across borders, to ensure fair taxation. The EU and OECD have provided tax authorities with various instruments such as the Anti-Tax Avoidance Directive (ATAD) and the Multilateral Instrument. The judgements handed down by the CJEU on the Danish cases have also set an important precedent.

However, since entities with no minimal substance and economic activity are supposedly still used for improper tax purposes, the European Commission recently issued a new proposal (ATAD 3). It is highly recommended that taxpayers already assess the possible impact of the proposal and consider opportunities for strengthening their local footprint and/or restructuring.

Sustainability is becoming an increasingly important factor in the decisions of investors, companies, consumers, shareholders and policy and law makers. The broadly supported awareness of Environmental, Social and Governance (ESG) objectives is reflected in many international voluntary standards as well as in an increasing number of European regulations.

Digital transformation is all about using the latest technology to improve your business model. Digital technology creates new business opportunities which in turn creates a whole new range of tax and legal challenges such as contracting, data protection, privacy questions, intellectual property, consumer protection and competition issues.

The speed at which digital technology has become an integral part of our daily lives has overtaken most legislative processes. In recent years, the European Union, Member-States and international legislative bodies have therefore increased their regulatory efforts.