Corporate Tax News

Issue 80 - November 2026

Multinational groups with related party transactions in Japan may need to strengthen their intercompany agreements, invoices and cost-allocation support to meet new supplementary recordkeeping requirements. This issue of Corporate Tax News leads with a look at how those requirements interact with existing transfer pricing documentation rules.

Tax authorities are also looking more closely at cross-border payments. In Australia, the final ruling on software royalties takes a broad view of when payments to offshore software and IP owners, including under distribution and SaaS arrangements, count as royalties subject to withholding tax.

On the legislative front, Luxembourg’s 2027 Budget Bill would lower the corporate income tax rate, and Denmark’s government is advancing a broad package of proposed business tax reforms. 

Courts have also been active. In the EU, the CJEU has further clarified the anti-abuse rule in the Parent-Subsidiary Directive, and the EU General Court has taken an economic approach to classifying components imported in split consignments. Denmark’s Supreme Court has extended the limitation period for certain withholding tax reclaims, and Germany’s Federal Fiscal Court has addressed the treatment of cross-border intragroup market development grants.

Two common threads run through this issue. First, authorities and courts are placing increasing emphasis on substance, economic purpose and contemporaneous documentation: from Japan’s recordkeeping rules and Australia’s software royalty ruling to the EU and German decisions, legal form alone may not determine the tax outcome. Second, the rules continue to shift, with rate cuts and reforms proposed in Luxembourg and Denmark. Businesses should review related party documentation, cross-border software and IP payments, and dividend and supply chain structures, and model the proposals as they progress.

This is the final issue of BDO’s Corporate Tax News. Thank you for your support and engagement over the years. Look out for our new approach to tax content — more in-depth pieces that start with the business issues multinational groups face and draw on the combined expertise of BDO firms across our network.