EU Tax Alert 214

CJ judgment on whether Belgium correctly implemented the CFC rules under the ATAD

(Commission v Belgium, C-524/23)

On 26 February 2026, the Court of Justice (CJ), delivered its judgment in the case Commission v Belgium (Case C‑524/23). The case concerns the alleged failure by the Kingdom of Belgium to transpose Article 8(7) of Directive (EU) 2016/1164 (the Anti-Tax Avoidance Directive, ATAD), which requires Member States to allow a deduction for taxes paid by a controlled foreign company (CFC) abroad, when its income is attributed to the domestic taxpayer. The central legal issue addressed by the CJ in this case is whether the provision mentioned above must be implemented when a Member State opts for the CFC regime set out in Article 7(2)(b) ATAD, which targets only non-genuine arrangements aimed at securing a tax advantage.

European Commission launches call for evidence on Omnibus on Taxation

On 17 February 2026, the European Commission launched a call for evidence for its upcoming ‘Omnibus on taxation’, a large‑scale tax simplification initiative intended to reduce reporting and compliance burdens for businesses and strengthen EU competitiveness. The legislative proposal is expected to be published in the second quarter of 2026. The call is open until 30 March 2026.

European Commission confirms application of OECD Side-by-Side Package

On 12 January 2026, the European Commission published a Notice (C/2026/253) in which it acknowledged the OECD Inclusive Framework Agreement on the Side‑by‑Side Package and confirmed its application in the context of Article 32 of Council Directive (EU) 2022/2523 of 14 December 2022 (Minimum Taxation Directive). 

CJ judgment regarding VAT treatment of loyalty points

(Lyko Operations AB, C-436/24)

On 5 March 2026, the CJ delivered its judgment in the case C-436/24 (Lyko Operations AB). The case concerns the question of whether loyalty points must be treated as a 'voucher' within the meaning of the VAT Directive (Directive 2006/112).

Opinion of AG Kokott on VAT implications of transfer pricing adjustments

(Stellantis Portugal, C-603/24)

On 15 January 2026, the Opinion of AG Kokott was published in the case C-603/24 (Stellantis Portugal). The case deals with the VAT aspects of a transfer pricing (TP) adjustment for intra-group supplies of goods.

Council has formally approved new customs duty rules for items contained in small parcels entering the EU

On 11 February 2026, the Council formally approved new customs duty rules for items contained in small parcels entering the EU, largely via e-commerce. The interim flat rate customs duty of EUR 3 will be levied on each item category contained in a small parcel entering the EU from 1 July 2026 to 1 July 2028 and may be extended as appropriate.