The Official End of Amount A?

A few weeks ago, US officials have made it explicit that Pillar One as originally conceived is off the table. In a February 19, 2026, public tax policy webcast,[1] Treasury officials stated that “Pillar One is ‘dead’” and that “there is no longer a two-pillar global tax reform solution”. This is far from a surprising statement. While in the past supportive in principle of Pillar One, the US never secured domestic approval (Congressional ratification), and there were clear doubts about obtaining the necessary political support in the US Senate. The United States, home to many of the largest tech and consumer companies, is bound to bear the brunt of Amount A’s reallocation. The US has always been indispensable for Pillar One’s success as many in-scope companies are US headquartered, and US treaty cooperation is needed. But any Pillar One agreement would require US Senate ratification and political opposition in Congress, particularly among lawmakers concerned about losing US tax revenue to other countries, meant the original Amount A “was never going to pass in the United States” in assistant secretary Rebecca Burch’s words.[2] This domestic hurdle loomed large over negotiations; other countries were reluctant to finalize a deal that the US might never join or implement. Eventually, following the 2025 change in administration, the US explicitly withdrew Pillar One, effectively ending negotiations.

Amount A Background

Pillar One was introduced under the OECD/G20 Inclusive Framework on BEPS (Base Erosion and Profit Shifting) as part of a two-pillar solution agreed in principle by over 130 countries in October 2021. Pillar One’s primary objective was to address “the tax challenges of the digital economy” (BEPS Action 1) by modernizing international corporate tax rules to better align taxing rights with where business value, particularly from large digital and consumer-facing companies, is created.

Under the old norms, profits are generally taxed only where a company has a physical presence (permanent establishment), which meant highly digitalized multinationals could earn substantial profits from users in a market country but pay little or no corporate tax there. This spurred unilateral responses like Digital Services Taxes (DSTs) in countries such as France, UK and India, aimed at taxing digital revenues of big tech firms. United States, home to many tech giants, viewed DSTs as discriminatory and opposed such unilateral taxes.[3] Thus, a key political bargain behind Pillar One was that market countries would drop their DSTs in exchange for a new global Amount A taxing right that grants them a share of residual profits of the largest multinationals.

Amount A targets only very large, highly profitable MNE groups. An MNE must have global annual revenues above approximately €20 billion and a profit margin greater than 10% to be in scope. For those MNEs meeting the threshold, a portion of their “residual profit” - defined as profit exceeding 10% of revenue, would be reallocated to countries where the MNE’s products or services are used/consumed (the market jurisdictions). The agreed formula was to allocate 25% of that residual profit to market countries, divided among eligible countries based on their share of the MNE’s revenue. This 25% Amount A share was an additional taxing right, and it effectively departs from the traditional arm’s-length transfer pricing and permanent establishment rules by granting market jurisdictions a slice of global profits even when the MNE may not have a conventional taxable presence.

Implementing Amount A required negotiating a Multilateral Convention (MLC) that all participating countries would sign and ratify to override existing bilateral tax treaties and enable this new profit allocation system. The MLC would legally bind signatories to allocate Amount A profits and remove any overlapping DSTs or similar unilateral measures. Again, for entry into force of the MLC, the US position was critical. The MLC to implement Amount A could enter into force only if jurisdictions representing at least 600 points ratify it, with points broadly allocated based on where the largest in-scope multinational groups are headquartered. Since the US itself accounts for more than 400 points, its ratification is essential for the MLC to enter into force, making the US political position decisive for Pillar One.[4] Together with the technical complexity of the rules, the apparent lack of relevant revenues for several jurisdictions and divergent political priorities among Inclusive Framework members have stalled progress and ultimately led to its apparent collapse.

DST is Not a Consensual Alternative

DST (Digital Services Tax) refer to a unilateral gross-revenue tax on certain digital activities. DSTs typically target large digital platforms (online ads, marketplaces, user data, etc.) and are levied at approximately 2%-5% of local revenues. They have much lower revenue thresholds and are enacted domestically. DSTs are relatively easy to implement, which is why they were perceived as an attractive alternative for many jurisdictions. The promise of Pillar One was to replace DST with a harmonized solution. With that promise now in limbo, countries feel free to maintain or introduce their own DSTs and/or similar unilateral measures to tax digital economy profits. Many had temporarily paused new DSTs pending a Pillar One deal in hopes of a multilateral agreement.[5] This portends a patchwork of national digital tax regimes persisting or growing, which is exactly what Pillar One aimed to prevent. In 2026, we may see more DSTs in Africa, Asia and Latin America - for example, Türkiye already has a 7.5% DST, Switzerland, Denmark and Portugal have DSTs, and other countries proposing new digital levies.[6] Meanwhile, some OECD/EU jurisdictions may expand or tweak existing DSTs (or even revive the idea of an EU-wide digital tax). The United States has consistently opposed DSTs and views them as unfairly targeting US based tech giants (like Google, Amazon, Facebook). The Office of the United States Trade Representative (USTR) has previously used trade tools to respond to DSTs considered discriminatory toward US companies. For example, following an investigation into the French Digital Services Tax, the USTR determined in 2019 that the measure unfairly targeted US digital firms and proposed tariffs of up to 100% on French imports.[7] Similar investigations were subsequently initiated into DSTs adopted or proposed by jurisdictions including the UK, Italy, Spain, Austria, India, and Türkiye, with the USTR finding several of these measures discriminatory.[8] With Pillar One’s failure to eliminate DSTs, the risk of trade conflicts is rising.

In February 2025, the US administration announced strong measures to counter foreign taxes and regulations, particularly digital services taxes that disproportionately impact American companies. It directs US trade and economic agencies to investigate such practices and, where necessary, impose tariffs or other countermeasures with the goal of protecting US technology firms, intellectual property, and global competitiveness from discriminatory foreign policies.[9] If multiple countries implement digital taxes, the US may enact trade measures or retaliatory taxes on foreign companies, leading to a tax-trade war in the digital economy sphere as well. 

What About the UN Negotiations?

During the February 2026 session of the Intergovernmental Negotiating Committee (INC) on the proposed United Nations Framework Convention on International Tax Cooperation,[10] delegates held discussions on Protocol 1 concerning the taxation of cross-border services income. The negotiations focused on how taxing rights should be allocated when services are provided remotely across borders, particularly in an increasingly digitalized economy. Key technical issues included the nexus that would allow a source jurisdiction to tax foreign service providers, with proposals discussing triggers based on factors such as payments received, market engagement, or physical presence. Delegates also discussed whether taxation should occur on a gross basis (e.g., withholding taxes on service payments) or on a net income basis, and how any new rules would interact with the existing network of bilateral tax treaties.

The developing countries, including members of the African Group, advocated expanding source-based taxation rights so that jurisdictions where services are consumed could tax foreign providers even without physical presence. These countries generally supported simpler mechanisms such as withholding-type taxes on cross-border services payments, which they consider more feasible for tax administrations with limited resources. By contrast, several developed countries, many of which are actively involved in international tax reforms under the OECD framework, emphasized the need to maintain consistency with existing treaty arrangements. Concerns were also raised that broad source-taxation rules could significantly alter the balance of taxing rights embedded in current bilateral tax treaties. The UAE delegate stated that payment for a service alone is not sufficient to create a nexus, arguing that taxation should occur where key value drivers, significant people functions, and entrepreneurial risk-taking functions are situated. India noted the complexity of defining value creation when both payers and users of services are in different jurisdictions.[11]

We May Go Back to SEP Solution?

Significant Economic Presence (SEP) refers to a broader nexus rule that treats substantial digital engagement as creating taxable presence. SEP rules extend the income tax base (or tax a deemed “digital profit” on turnover) for non-resident firms. For example, Kenya’s new SEP regime[12] (effective December 2024) taxes 10% of gross revenue at a 30% rate (effectively 3% of turnover), replacing its prior 1.5% DST. SEP (and similar “equalization” taxes) targets digital activities via income rather than pure turnover and often includes local revenue or user‑count thresholds. These solutions appear to be gaining popularity in other countries. Already the 2018 proposal by the European Commission[13] proposed a SEP concept as a solution for taxing digitalized economy. It proposed creating a ‘Digital’ permanent establishment to tax companies even without having a physical presence in a member country. Digital businesses would be considered to have such a presence if it exceeds certain thresholds in a Member State, such as high revenues from digital services, a large number of users, or a significant number of online contracts with local users. Once the nexus is established, the company would be treated as having a digital permanent establishment in that jurisdiction. Profits attributable to that digital presence would then be allocated and taxed in that Member State. Similar to the EU’s proposal, Israel[14] had also explored the possibility of establishing a taxable nexus based on significant economic activity in the Israeli market, even in the absence of physical presence. It was introduced as an administrative guidance but has not yet been legislated. Separately, Italy amended its domestic PE definition through the 2018 Budget Law to include a “significant and continuous economic presence” in Italy, allowing a taxable nexus to arise even in the absence of a physical presence.[15]

A simplified solution like this which adapts to the existing corporate tax concepts (such as Permanent Establishment) rather than creating new mechanisms may likely be acceptable as a multilateral solution.

The Future for Taxing Digitalized Economy

Despite this recent announcement, the US is not abandoning the issue of digital economy taxation altogether. Treasury Secretary Scott Bessent indicated that the US wants to explore ways to reach an appropriate agreement on taxation of the digital economy.[16] The officials insist that any new agreement must be something the United States finds acceptable, implying a more modest or fundamentally different approach than the original Pillar One blueprint.

But a new OECD Pillar One initiative (Pillar One - 2.0) seems unlikely during 2026. The OECD’s current priority is Pillar Two implementation with indications that Pillar One discussions must be on hold for now. At best, 2026 may see limited technical dialogue with no new multilateral Pillar One negotiations expected without a major political shift. Frustration among developing countries with the OECD process has also catalyzed UN’s initiative on international tax cooperation, with the latest meeting of Intergovernmental Negotiating Committee held in February 2026 (discussed above). Developing nations see the UN as a more inclusive forum where their interests (such as simpler rules and a greater share of taxing rights) carry more weight. If the OECD solution fails, the UN could step in to fill the void, though designing a new system through the UN may again take years and would face its own political hurdles.

In the absence of Amount A, efforts to modernize tax systems could include tighter enforcement of existing profit allocation rules, more rigorous transfer pricing audits for digital businesses, or new bilateral tax treaty provisions to handle digital commerce. These piecemeal steps will not fully solve the underlying problem of taxing highly digitalized businesses, but they represent how countries might cope while a comprehensive solution is elusive.

Looking ahead, 2026 and beyond could play out in a few ways. Optimists would hope for a revived global negotiation - whether under OECD or a new framework that yields a simpler, agreeable successor to Pillar One’s Amount A. Such a solution would need to deliver fairness, simplification, and certainty to the system, possibly by incorporating some concepts of SEP or other novel nexus approaches. While others would warn of a prolonged impasse, where no broad agreement is reached and nations simply continue with uncoordinated digital taxes, leading to growing friction. A third path could be shifting the conversation to the United Nations, creating a new inclusive global tax agreement that might better accommodate the demands of developing economies for a greater share of taxing rights. In any event, the common understanding is that the issues Pillar One sought to address just have not gone away, and they will probably intensify over time if left unresolved. The coming years will reveal whether the international community can converge on an alternative solution or if the world enters a new era of tax unilateralism and potential conflicts.

USA

February 18, 2026: IRS Updates Interim Corporate Alternative Minimum Tax Guidance[17]

IRS issued Notice 2026-7 clarifying the application of the corporate alternative minimum tax under IRC §§55, 56A and 59 and modifying prior interim guidance in response to public comments. The Notice adjusts the calculation of Adjusted Financial Statement Income (AFSI), including treatment of tax-deductible repairs for section 168 property, amortization timing for section 197 intangibles, domestic R&D amortization, production-cost capitalization and amortization for film, TV, live productions and sound recordings, and low-cost tangible-property. The Notice also provides relief for financially troubled companies and modifies anti-abuse/cross-border rules (including coordination with IRC section 367(d) for intangible transfers). Taxpayers may rely on the rules in the Notice before the proposed regulations are published, subject to consistency and other requirements.

February 25, 2026: IRS Previews Simplified Foreign Currency Gain and Loss Rules[18]

IRS issued Notice 2026-17 previewing proposed section 987 regulations for determining the taxable income or loss, and foreign currency gain or loss, of a taxpayer with a “qualified business unit” that has a functional currency different from its owner. The proposed regulations would allow the use of a modified version of the equity and basis pool method to compute section 987 gain and loss and would include other rules that reduce compliance burdens and limit the impact on ordinary course transactions. Taxpayers may generally rely on the Notice for tax years ending before the proposed regulations are published and to which the 2024 final regulations apply, subject to certain requirements. The Notice also announces that future guidance is expected to include an election for controlled foreign corporations to opt out of the gain and loss recognition rules under section 987(3), with some exceptions.

Canada

February 20, 2026: Canadian Appeal Court Overturns Tax Court, Invokes GAAR in Cross Border Continuance Case[19]

The Federal Court of Appeal (FCA) reversed the decision of the Tax Court of Canada and held that the General Anti-Avoidance Rule (GAAR) applied to deny the tax benefit of “non-CCPC” planning, because of the abuse of certain anti-deferral rules. Such “non-CCPC” planning was quite common in Canadian M&A transactions until legislative changes introducing the “substantive CCPC regime” were introduced in the 2022 federal budget specifically targeting such planning. The FCA found that the taxpayer, DAC Investment Holdings, Inc., intentionally ceased to qualify as a Canadian Controlled Private Corporation (CCPC) immediately before selling shares of a subsidiary to a purchaser in a M&A transaction after re-domiciling to the British Virgin Islands, defeating the object, spirit, and purpose of the anti-deferral rules contained in the Income Tax Act by maintaining central management and control in Canada (prior to the implementation of the new substantive CCPC regime).

Please refer A&M Tax Alert[20] for detailed analysis.

Austria

February 01, 2026: Austria Notifies MCAA for GloBE Information Returns[21]

Austria has published Law No. 17/2026, which brings into effect the Multilateral Competent Authority Agreement (MCAA) for GloBE Information Returns. Austria signed this agreement on June 26, 2025, which entered into force on January 08, 2026.

Belgium

February 09, 2026: Belgium Updates Advance Tax Mechanism for IIR Tax[22]

The Ministry of Finance has revised the method for making advance payments of the Income Inclusion Rule Top‑up Tax under the Pillar Two minimum tax system, effective January 2026. Each group entity must now pay its own instalment. Payments can be submitted using the entity‑specific structured reference on MyMinfin or through the tax administration’s online payment tool.

February 26, 2026: EU ATAD Compliance – ECJ Ruling on Belgium[23]

On February 26, 2026, the Court of Justice of the European Union (ECJ) ruled in European Commission v. Kingdom of Belgium (Case C‑524/23) that Belgium failed to fulfil its obligations under the Anti‑Tax Avoidance Directive (ATAD) by not adopting the measures required to implement Article 8(7) on controlled foreign company rules. The Court ordered Belgium to bear its own costs and pay those incurred by the European Commission, while the Kingdom of the Netherlands was ordered to bear its own costs. It is a major EU tax‑technical ruling which has confirmed the mandatory nature of the foreign tax credit within controlled foreign company regimes, with implications for all Member States’ implementation of ATAD and an increased likelihood of legislative amendments across the EU.

Bulgaria

February 25, 2026: Bulgaria Approves and Ratifies CARF MCAA and CRS Addendum[24]

On February 18, 2026, the Bulgarian Parliament’s National Assembly approved the Multilateral Competent Authority Agreement on Automatic Exchange of Information Pursuant to the Crypto-Asset Reporting Framework (CARF MCAA). Further, on February 25, 2026, Bulgaria ratified both the CARF MCAA and the Addendum to the Common Reporting Standard (CRS) MCAA (2024) via Decree No. 61. The CRS Addendum adds new reporting fields from the 2023 CRS update, enhancing the CRS for robust international tax compliance.

Czech Republic

February 04, 2026: Government Moves Forward with Bill for DAC8 and DAC9[25]

The Government has advanced a draft bill to the Parliament that would incorporate into national legislation the 2023 (DAC8) and 2025 (DAC9) amendments to the EU Directive on Administrative Cooperation. The draft approved on February 02, 2026, is now undergoing the formal legislative process, which will continue until all necessary approvals are secured.

Finland

February 12, 2026: Government Submits Additional Amendments to the Minimum Tax Regime[26]

The Government has submitted a new bill (HE 6/2026) to Parliament proposing further amendments to Finland’s Law on Minimum Tax by Large Groups, supplementing the earlier proposal HE 196/2025. The amendments, which reflect points raised during the public consultation launched on February 04, 2026, are intended to take effect as soon as possible and no later than March 31, 2026, and would apply to financial periods beginning on or after January 01, 2026.

France

February 20, 2026: France Publishes 2026 Finance Law[27]

Following prolonged negotiations and the achievement of an implicit agreement with political parties in mid‑January, the government initiated the special constitutional procedure for the adoption of the 2026 Finance Bill under Article 49(3) of the Constitution. The Constitutional Court reviewed certain measures prior to publication, validating most while annulling minor provisions for procedural reasons. Thereafter, France has gazetted the Finance Law for 2026 in the Official Journal under No. 2026-103.

Germany

February 01, 2026: Germany Releases DAC8 Crypto Reporting Data Set[28]

Germany’s Ministry of Finance has published the officially prescribed data set for DAC8 reporting on crypto-asset services. Under Sections 9, 11 and 12 of the Crypto-Asset Tax Reporting Law, crypto-asset service providers must submit reports to the Federal Central Tax Office via remote data transmission using this designated data set and specified interfaces.

Hungary

February 20, 2026: Hungarian Tax Authorities Clarifies Changes to Top-Up Tax Reporting Forms[29],[30]

The Hungarian tax authorities issued guidance on updates to the GloBE notification form under Decree 4/2026 from the Ministry for National Economy published late January 2026 and effective February 26, 2026. This decree outlines top-up tax reporting, declarations, payments (including currencies and exchange rates), first applying to the 2025 tax year (optionally 2024). Key changes include mandatory details on the GIR/DAC9-reporting group member (name, tax number, country code); disclosure of designated local organization changes; specification of applicant role (designated local or independent, affecting group-wide obligations); and a declaration confirming Minimum Tax Act status as joint venture or group, with individual filers factoring in joint ventures for counts.

Italy

February 06, 2026: Tax Authorities Release Pillar Two Form for Reporting[31]

The tax authorities have issued the official form and guidance that in‑scope constituent entities must use when declaring and paying any additional tax arising as per Minimum Taxation Directive (2022/2523) on minimum taxation. Entities must submit the declaration electronically, either on their own or through an authorized representative using the tax authority’s electronic filing system. The launch date for electronic submissions will be announced on the tax authorities’ website. Free filing software titled “DichiarazioneGloBe” is available for download, with technical details to be outlined in a forthcoming notice. The form and accompanying instructions were formally approved through Protocol No. 46523/2026.

February 12, 2026: Resolution No. 7/E – VAT Deduction of Transactions Costs in Case of MLBO[32]

In Resolution No. 7/E of February 12, 2026, the Italian tax authorities clarified that a Special Purpose Vehicle (SPV) used in a Merger Leveraged Buyout (MLBO) is entitled to deduct VAT incurred on transaction costs. In the authorities’ view, the SPV should not be regarded as a mere “static” holding company, but rather as a VAT-taxable person, since its incorporation is a necessary preparatory step in the MLBO and is functionally linked to the economic activity to be carried on by the post-merger entity. Accordingly, transaction costs constitute preparatory investment expenses directly connected with the taxable business activity of the company resulting from the merger, and the related input VAT is therefore deductible, subject to the general requirements concerning taxable status and the use of the relevant inputs for taxable supplies. In reaching this conclusion, the tax authorities relied on the principle of VAT neutrality as developed by the Court of Justice of the European Union, including in Case C-42/19, Sonaecom SGPS SA, and aligned themselves with the approach adopted by the Italian Supreme Court in Judgments No. 22608/2024 and No. 22649/2024.

Netherlands

February 02, 2026: Netherlands Updates Transfer Pricing Governance[33]

The Dutch State Secretary for Finance has issued an updated decree revising the responsibilities of the Coordination Group on Transfer Pricing to cover developments since the previous guidance released in 2018. The revised mandate requires the group to ensure consistent interpretation and application of the arm’s length principle in relation to rules combating deduction‑and‑non‑inclusion outcomes within multinational structures, provisions requiring upward transfer pricing adjustments where the value of transferred assets or functions exceeds the consideration paid, and the legislative framework implementing the global minimum tax through the Minimum Taxation Act 2024.

Poland

February 19, 2026: Polish Parliament Moves Ahead with DAC8/DAC9 Legislation[34]

Poland’s lower chamber (Sejm) approved a bill on February 13, 2026 amending the Law on the Exchange of Tax Information with Other Countries to implement DAC8 (Directive 2023/2226) and DAC9 (Directive 2025/872) into domestic legislation. The bill now awaits upper chamber (Senat) approval – scheduled for debate on March 15, 2026 – and the President’s signature to become law.

Sweden

February 01, 2026: Sweden Advances DAC9 Legislation[35]

The Ministry of Finance has submitted to Parliament a legislative proposal (2025/26:102) that would implement the DAC9 Directive. The Bill proposes amendments arising from the GloBE Model Rules to align Swedish legislation with international standards on tax transparency and cooperation. The provisions are intended to take effect from May 1, 2026, except for amendments to the Public Access and Secrecy Act, which are proposed to enter into force on August 1, 2026, and amendments to the Act on the Council of Europe and OECD Convention on Mutual Assistance in Tax Matters, which will take effect on a later date to be announced.

February 05, 2026: Sweden Initiates Review to Update VAT System and Strengthen Controls Against Tax Fraud[36]

The Government has begun a formal review to determine how Sweden should incorporate upcoming European Union requirements for digital reporting of intra‑EU trade as part of the VAT in the Digital Age initiative. The new framework will require businesses to issue electronic invoices and submit transaction data digitally, prompting an assessment of the legislative changes needed to introduce these obligations into national law. The inquiry will also examine whether mandatory e‑invoicing and digital reporting should extend to domestic business‑to‑business transactions and how the Tax Agency may use the information collected through these systems. A final report is to be submitted by November 30, 2027.

Ireland

February 04, 2026: Irish Revenue Updates Guidance on Automatic Exchange of Information[37]

Irish Revenue has published eBrief No. 031/26 announcing updates to its Tax and Duty Manuals on Automatic Exchange of Information to reflect recent EU developments, including the expansion of DAC3 and the implementation of DAC8 from January 01, 2026. The guidance confirms that advance cross‑border tax rulings issued to individuals must now be exchanged with EU tax authorities where the ruling concerns tax residence or involves transactions exceeding €1.5 million and introduces new provisions covering the exchange of information on crypto‑asset transactions under CARF and DAC8. The updates also clarify the legal basis for certain CRS exchanges (now under the Multilateral Convention rather than specific DTAs), tighten restrictions on the use of exchanged data, and expand Appendix One to include new exchange relationships.

Türkiye

February 19, 2026: Türkiye’s Revenue Administration Clarifies Property Gains Taxation[38]

The Government has issued guidance clarifying the taxation of capital gains from the disposal of immovable property under Article 80 of the Individual Income Tax Law, confirming that gains arising from disposals within five years of acquisition are taxable, while disposals after this period fall outside the scope. Taxable gains are calculated as the difference between the sale price and the indexed acquisition cost, subject to inflation indexation using the domestic producer price index where the cumulative increase exceeds 10% and are eligible for an annual exemption (TRY 120,000 for 2025 and TRY 150,000 for 2026). The guidance also clarifies the determination of the acquisition date, particularly for housing cooperatives and construction projects, outlines filing and payment obligations for resident and non-resident individuals, and reiterates that gains from inherited or gratuitously acquired property are not taxable.

United Kingdom

February 9, 2026: UK Large Business Compliance – HMRC Issues Group Structure Guidance[39]

His Majesty's Revenue and Customs (HMRC) has published new guidance for large and complex business groups on submitting information about corporate group structures and transactions, intended to support more effective and collaborative engagement with HMRC. The guidance is relevant across a range of interactions, including statutory clearances, advance pricing agreements, profit diversion compliance facility disclosures, compliance checks, and large business risk reviews. While use of the guidance is not mandatory, HMRC sets out expectations to ensure key information is presented in a clear, consistent and standardized manner, including details of entity type, ownership and control, tax jurisdiction, and any special characteristics. The guidance also applies to partnerships and hybrid entities and includes illustrative examples using recommended layouts.

February 10, 2026: HMRC Invites Comments on CBAM Policy[40]

HMRC has published a policy paper outlining the UK’s proposed Carbon Border Adjustment Mechanism (CBAM), which is intended to apply from January 01, 2027. The paper summarizes the CBAM policy framework and the approach to developing the underlying legislation and guidance. Alongside the policy paper, HMRC has released draft secondary legislation, notices and GOV.UK guidance for stakeholder feedback, including from importers in the aluminum, cement, fertilizers, hydrogen, and iron and steel sectors, downstream users of these goods, and overseas operators. Consultation on the draft regulations is open until March 24, 2026.

February 25, 2026: HMRC Updates Pillar Two Notice for Relevant Territories[41]

HMRC has updated Notice 2 - Pillar Two top‑up taxes: relevant territories and taxes on February 25, 2026, expanding the statutory lists of recognized jurisdictions. With effect from January 01, 2025, Hong Kong and Qatar have been added as Pillar Two territories, while Bahrain, Hong Kong and Qatar are now recognized as jurisdictions with a qualifying domestic top‑up tax (QDMTT) and an accredited QDMTT. The lists set out in Notice 2 have the force of law.

Hong Kong

February 25, 2026: Hong Kong Budget 2026-27[42]

Anchored by the theme “Driving High‑quality, Inclusive Growth with Innovation and Finance”, the Budget focuses on sustaining growth momentum, advancing long‑term capability building and positioning Hong Kong to capture new opportunities by proposing measures to bolster competitiveness and support businesses and individuals through tax reliefs and targeted incentives.

Key tax‑related measures include refinements to the funds tax regime, a relaxation of stamp duty relief conditions for certain intra‑group transfers and a commitment to review existing tax incentives.

Please refer A&M Tax Alert for detailed analysis.

Vietnam

February 03, 2026: Vietnam Introduces Consultation Draft on Crypto Asset Taxation[43]

On February 03, 2026, Vietnam’s Ministry of Finance released a draft circular proposing a tax framework for crypto and other digital asset transactions. Under the proposal, organizations transferring tokenized assets and providing tokenized asset services, would generally be subject to 20% corporate income tax on taxable income, with reduced rates of 17% or 15% in certain specified cases. Foreign organizational investors transferring tokenized assets and individual (resident or non-resident) transferring crypto assets through licensed service providers would be taxed at 0.1% on gross transaction proceeds. Digital asset transfers and trading would be exempt from VAT, although related services, not specifically covered under the exemption, may still be subject to VAT. The proposal is currently open for public consultation.

India

February 01, 2026: India Unveils Key Tax Reforms in Budget 2026[44]

The Finance Bill 2026, presented on February 01, 2026, proposed a broad package of tax reforms effective April 01, 2026, unless otherwise indicated. Key measures included wider safe harbor options in transfer pricing, new tax holidays for select sectors such as data centers, minimum alternate tax to be final tax liability along with limits on minimum alternate tax credit utilization, buy-back of shares to be taxable as capital gains (instead of deemed dividend) and an extended 20‑year incentive period for financial center units. The Bill also introduced personal tax changes, including a voluntary disclosure scheme for foreign assets and income, increase in Securities Transaction Tax (STT) rates for derivative trading, along with other changes in corporate tax, GST, and customs provisions.

Please refer to the A&M Tax Alert for detailed analysis.

February 08, 2026:CBDT Seeks Public Feedback on Proposed Income‑tax Rules for 2026 Rollout[45]

The Central Board of Direct Taxes (CBDT) has released the draft Income‑tax Rules, 2026 for public consultation ahead of their implementation on April 01, 2026, alongside the Income‑tax Act, 2025. The proposed Rules focus on simplifying language, easing compliance, reducing litigation, and removing obsolete provisions, with greater use of structured tables and formulas. Stakeholders were invited to submit feedback in these areas by February 22, 2026.

Assuming the Tax Treaty enters into force in calendar year 2026, the proposed effective dates for various Articles would be as under:

• April 01, 2029 – Dividends and Capital gains
• January 01, 2024 (Retrospective) – Royalties and FTS
• Date of Entry into Force – MAP, Exchange of Information and Collection of taxes
• April 01, 2027 – All other Articles

China

February 01, 2026: China Updates VAT and Consumption Tax Refund Framework for Exports[46]

China’s Ministry of Finance and State Taxation Administration have issued Announcement No. 11 (2026), effective January 01, 2026, setting out the updated VAT and Consumption Tax refund and exemption rules for exports under the new VAT framework. The policy clarifies eligibility for VAT refunds or exemptions on exported goods, services and intangible assets, defines when each refund method applies, outlines documentation and calculation requirements, and notes that refund rates will be published by the tax authority. It also confirms that certain exports qualify only for VAT exemption without refund, and that eligible exports are exempt from Consumption Tax, with refunds available for previously paid Consumption Tax in specified cases.

February 01, 2026: China Issues a Series of VAT Administrative Rules Including Input VAT and Long-term Asset Treatment[47]

To support implementation of the new VAT Law, China issued a package of technical guidance, including Announcement No. 13 (2026) on input VAT treatment, Announcement No. 14 (2026) on VAT prepayments, and Announcement No. 15 (2026) on input VAT credits for long-term assets. Together, these rules clarify deductible input VAT items, the treatment of qualifying asset restructurings, transactions involving multiple VAT rates, and the timing of VAT liability; they also formalize the new mechanics for mixed-use long-term assets and VAT prepayment administration. These measures are important because they convert the new VAT Law and its implementation regulations into a more operational framework for taxpayers.

February 01, 2026: China Preserves Selected VAT Incentives During Transition to New VAT Law[48]

China has issued additional notices confirming the continued application of certain existing VAT incentives during the transition to the statutory VAT Law framework. These measures maintain selected relief policies for specific industries and taxpayers while authorities finalize the operational rules under the new VAT regime.

February 01, 2026: Tax Controversy/Enforcement Outlook[49]
China’s National Tax Work Conference signaled a continued shift toward stronger tax enforcement in 2026, with authorities emphasizing risk-based supervision and targeted audits. Key focus areas include export VAT refunds, invoicing practices, abuse of preferential policies, and arrangements lacking commercial substance, reflecting a more data-driven enforcement environment for businesses operating in or through China. 

February 06, 2026: Tax Relief Introduced for Returned Cross-Border E-commerce Export[50]

China introduced tax relief for certain cross-border e-commerce goods exported and subsequently returned within six months due to unsold inventory or returns. Qualifying goods may be exempt from import duties, import VAT, and Consumption Tax, subject to conditions, while export duties previously paid may be refunded.

Singapore

February 02, 2026: IRAS Publishes Updated CRS Jurisdiction Lists[51]

On February 02, 2026, Inland Revenue Authority of Singapore (IRAS) updated its lists of reportable and participating jurisdictions, for the automatic exchange of financial account information under the Common Reporting Standard (CRS) Multilateral Competent Authority Agreement (MCAA) and Singapore’s bilateral exchange arrangements. Rwanda, Senegal and Uganda were newly added as reportable jurisdictions for the 2025 reporting year. Singapore‑based entities required to report under CRS (for the 2025 reporting cycle), must file their submissions by May 31, 2026. These three jurisdictions were also added to the list of participating jurisdictions, with the revised list taking effect on February 02, 2026.

February 12, 2026: Singapore Budget 2026 Introduces Corporate Tax Reforms and Incentive Changes[52]

Lawrence Wong presented Budget 2026 to Parliament on February 12, 2026, setting out measures to ease cost-of-living pressures, strengthen business support and position Singapore to harness AI opportunities.

Some of the key incentive measures in Budget 2026 are enhancements and extensions to several existing schemes: the Double Tax Deduction for Internationalization (DTDi) scheme will see higher expenditure caps for claims without prior approval and an expanded scope of qualifying overseas market development and investment activities; the Enterprise Innovation Scheme (EIS) continues to provide enhanced deductions and allowances for qualifying R&D, innovation and capability‑building expenditure; the Finance and Treasury Centre (FTC) incentive will be extended to support treasury and financing activities conducted from Singapore; and the Global Trader Programme (GTP) will continue to be used to support trading activities and strengthen Singapore’s position as a global trading hub.

Please refer to A&M Tax Alert[53] for detailed analysis.

February 26, 2026: Committee of Supply 2026: Extension of GST InvoiceNow Requirement[54]

At the Ministry of Finance Committee of Supply 2026, IRAS announced a significant expansion of the GST InvoiceNow requirement. What began as a soft launch and a requirement for new voluntary GST registrants will now be progressively extended to all GST registered businesses, with full adoption required by April 2031. Under this framework, GST registered businesses will be required to transmit invoice data directly to IRAS via the InvoiceNow network, which is built on the internationally recognised Peppol e-invoicing standard.

Please refer to the A&M Tax Alert[55] for detailed analysis.

Malaysia

February 03, 2026: MIRB Publishes Guidelines on the Application of Domestic Top-up Tax in Malaysia[56]

Malaysia has introduced the Global Minimum Tax (GMT) framework through two mechanisms: the Domestic Top-up Tax and the Multinational Top-up Tax. Currently, Malaysia does not implement Undertaxed Payment Rule under its current legislations. These measures will apply to financial years commencing on or after January 01, 2025, and will continue to apply for subsequent financial periods. To support the GMT framework, the Malaysian Inland Revenue Board (MIRB) has issued specific guidelines, to outline how the DTT regime will operate in Malaysia. It provides clarification on areas such as the scope of application, calculation methodology, compliance requirements, and relevant administrative processes. In general, the approach set out in the guidelines align with the OECD Inclusive Framework.

UAE

February 23, 2026: UAE Issues Electronic Invoicing Guidelines[57]

On February 23, 2026, the Ministry of Finance (MoF) issued detailed operational guidance supporting - Ministerial Decision No. 243 of 2025 (Electronic Invoicing System), Ministerial Decision No. 244 of 2025 (Implementation Timeline), Ministerial Decision No. 64 of 2025 (Accreditation of Service Providers) and the Cabinet Decision No. 106 of 2025 (Penalties). The Guidelines outlines the scope, technical model and phased introduction of mandatory e‑invoicing for Business-to-Business (B2B) and Business-to-Government (B2G) transactions.

Please refer to the A&M Tax Alert[58] for detailed analysis.

Saudi Arabia

February 17, 2026: Saudi Arabia Issues Draft Economic Substance Rules for SEZ Activities[59]

The Zakat, Tax and Customs Authority (ZATCA) has released draft regulations for public consultation setting out the proposed Economic Substance Requirements (ESR) for investors operating in Special Economic Zones (SEZs). Under the draft rules, investors must meet annual substance criteria beginning from the first financial year in which they undertake qualified activities. These criteria include maintaining adequate premises and assets within the zone, employing an adequate number of full-time employees physically present in the zone, incurring operating expenditure proportionate to the nature of the activities, and ensuring that qualified activities are directed and managed from within the zone, with at least one director responsible for such activities residing in the Kingdom. Additional requirements apply to investors engaged in Intellectual Property (IP) activities. These include having at least 50% of directors reside in the Kingdom, providing detailed business plans demonstrating the commercial rationale for holding IP assets in the zone, submitting detailed employee information, and demonstrating that strategic decisions and risk management relating to IP assets occur within the zone. Income from marketing intangibles is excluded from SEZ incentives. The consultation period ran from February 16 to March 03, 2026.

Qatar

February 12, 2026: Qatar Sets Out Rules for Global Minimum Tax[60]

Qatar has issued detailed implementation rules for its Global and Domestic Minimum Tax regime, introduced under Law No. 22 of 2024, covering both a DMTT and an Income Inclusion Rule (IIR) and aligned closely with the OECD GloBE Rules. The rules largely replicate the GloBE framework on scope, charging provisions and computation, and introduce comprehensive administrative obligations, including tax registration for all in‑scope entities (including JVs), filing of GloBE Information Returns and DMTT/IIR returns, and notification requirements. The regime is to be interpreted consistently with OECD GloBE guidance, and Qatar will rely on the Inclusive Framework’s qualification and monitoring outcomes for determining the status of other jurisdictions and safe harbor eligibility; notably, Qatar has been recognized as having a Qualified DMTT Safe Harbor and a Qualified IIR, with joint and several liability applying to all Qatar‑based constituent entities for the group’s DMTT. These rules took effect on February 12, 2026.

Australia

February 01, 2026: Australia Signs GIR MCAA[61]

Australia entered into the Multilateral Competent Authority Agreement on the Exchange of GloBE Information (GIR MCAA), strengthening its engagement with the Pillar Two framework of the OECD/G20 Inclusive Framework. The GloBE rules require multinational groups to submit an annual GloBE Information Return, and the GIR MCAA serves as the mechanism through which participating jurisdictions exchange this information automatically. The agreement also meets the definition of a Qualifying Competent Authority Agreement for GloBE purposes.

February 16, 2026: Australia Issues Exposure Draft Rules Amending Global and Domestic Minimum Tax Regime[62]

The Australian Government released the Taxation (Multinational – Global and Domestic Minimum Tax) Amendment (2026 Measures No. 1) Rules 2026 exposure draft. The proposed changes are intended to ensure the effective operation of Australia’s domestic minimum tax and alignment with the OECD GloBE rules. In particular, the amendments:

• Clarify the operation of the domestic minimum tax in relation to stateless entities with an Australian nexus.
• Refine the interaction between the domestic minimum tax and the Australian tax consolidation rules.
• Ensure covered taxes are allocated consistently with the allocation of GloBE income for certain entities.
• Make technical adjustments to ensure the domestic minimum tax operates as intended.
• Introduce foreign currency translation rules for relevant calculations under the regime.

New Zealand

February 18, 2026: Inland Revenue Clarifies Post-Transition Opening Value for Foreign Investment Fund[63]

In a technical decision summary published on February 18, 2026, Inland Revenue clarified the determination of the opening value of a Foreign Investment Fund (FIF) interest where a taxpayer’s transitional residence period has ended.

The decision confirms no FIF income arises during the transitional residence period. Where the transitional period ended on December 31, 2024, the taxpayer is treated as acquiring their FIF interests on January 01, 2025. As a result, the opening value for the Fair Dividend Rate (FDR) method at the start of the 2025 income year is nil, meaning FIF income for that year would arise only from quick sale transactions.

Inland Revenue concluded that this outcome is consistent with the policy intent of the transitional residence regime and confirmed that no tax avoidance was present and the general anti‑avoidance rule does not apply.

• On February 09, 2026, the United States and Bangladesh announced a Reciprocal Trade Agreement to expand market access, lower tariffs, and strengthen economic cooperation. The deal provides preferential access for U.S. goods in Bangladesh, reduced and zero tariffs for selected Bangladeshi exports to the U.S. (including a quota‑linked textile mechanism), and commitments by Bangladesh on labor, environment, IP, data flows, customs modernization, and regulatory reforms.[64]
• On February 12, 2026, the United States and Taiwan finalized a reciprocal trade agreement under which the US will apply the higher of 15% or the Most Favored Nation tariff on most imports from Taiwan, replacing higher duties introduced in 2025. In return, Taiwan will eliminate or substantially reduce tariffs on around 99% of US goods and provide preferential market access for various US agricultural and industrial products.[65]
• On February 20, 2026, the U.S. Supreme Court issued a landmark decision in Learning Resources Inc. v. Trump (consolidated with Trump v. V.O.S. Selections Inc.) ruling that President Trump does not have the authority to use the International Emergency Economic Powers Act (IEEPA) of 1977 to impose sweeping global tariffs. The Court held that IEEPA, intended for national emergencies, does not grant the President the power to set taxes or duties without explicit congressional approval.[66]

Please refer to the A&M Tax Alert[67] for detailed analysis. The process and systems for potential refunds are under development.

• On February 24, 2026, the Trump administration determined that significant balance‑of‑payments pressures require temporary import restrictions and, under section 122 of the Trade Act of 1974, has imposed a 10% ad valorem import surcharge for up to 150 days. The surcharge applies broadly to imports but excludes specified categories such as energy, pharmaceuticals, certain agricultural products, vehicles, aerospace goods, electronics, and goods covered by existing trade agreements or national security tariffs, with the objective of managing balance‑of‑payments imbalances while safeguarding critical economic and security interests. [68]
• The European Parliamentary Research Service published a briefing which examines the US Supreme Court’s February 20, 2026, ruling in Learning Resources, Inc. v. Trump, invalidating tariffs imposed under IEEPA since January 2025 (e.g., April 2025 reciprocal tariffs). The briefing covers uncertainty on tariff refunds post the decision, prompting cautious ongoing EU analysis, business concerns over unpredictability, and a pause by the European Parliament’s Committee on International Trade on related legislative files.[69]
• On February 24, 2026, the Gulf Cooperation Council and India announced the start of negotiations for a Free Trade Agreement (FTA), following the signing of the Terms of Reference earlier. The planned FTA seeks to reduce tariff and non-tariff barriers, encourage investment, and strengthen economic cooperation between the two sides.[70]
• The European Parliamentary Research Service published a briefing which examines the US Supreme Court’s February 20, 2026, ruling in Learning Resources, Inc. v. Trump, invalidating tariffs imposed under IEEPA since January 2025 (e.g., April 2025 reciprocal tariffs). The briefing covers uncertainty on tariff refunds post the decision, prompting cautious ongoing EU analysis, business concerns over unpredictability, and a pause by the European Parliament’s Committee on International Trade on related legislative files.[71]