Corporate Tax News

Issue 77 - February 2026

The global tax landscape is shifting rapidly as governments work to balance competitiveness, compliance and international alignment. Across budgets, treaties, reforms and regulatory updates, countries are implementing changes that will influence how MNEs plan and operate in 2026 and beyond. The February 2026 CTN brings together the most notable developments shaping strategic and compliance priorities for businesses for the year ahead, accompanied by a chart summarising corporate and WHT rate changes for 2026. 

Budget activity signals a clear pivot toward technology‑driven growth. India and Singapore have each placed AI at the centre of their economic strategies. India is deploying targeted tax incentives to attract data‑centre investment and strengthen AI‑driven digital infrastructure, reinforcing its position as a long‑term technology hub. Singapore is rolling out an initiative to support corporate adoption of AI tools, paired with tax breaks for related expenditure to accelerate private‑sector innovation and digital transformation. France is also refining its fiscal agenda, with all three markets emphasising competitiveness, workforce capability and sustainable economic expansion.

Pillar Two developments remain central. This issue includes an article examining the implications for real estate companies, as well as the quarterly round-up of Pillar Two developments around the world. Real estate companies often benefit from low-tax regimes or deferrals and may now trigger top-up taxes, particularly because specific real estate entities may not qualify for simplified safe harbours. 

Tax treaty policy is shifting in ways that reshape cross‑border compliance expectations. The OECD’s updated model treaty introduces clarifications and optional provisions designed to reflect contemporary business practices, with implications for natural resource activities and entities operating in Gulf Cooperation Countries. In India, a landmark Supreme Court ruling elevates the importance of economic substance over formal documentation, confirming that a tax residency certificate alone is no longer sufficient to establish treaty eligibility, a shift that raises the bar for foreign investors. Additional treaty‑related updates include Belgium’s elimination of WHT on cross‑border payments for the rental or leasing of movable property, and a clarification in Chile of who may request refunds of excess dividend WHT in structure that use foreign custodians. A court decision in Germany strengthens treaty‑based relief for taxpayers receiving US dividends. Indonesia has issued more stringent guidance aligned with OECD BEPS standards, adding enhanced substance requirements and anti‑abuse rules to prevent artificial avoidance of PE status. 

Domestic tax reform continues. Cyprus has enacted a broad reform package increasing the corporate tax rate and updating rules across corporate taxation, capital gains and compliance obligations to align with international expectations. Japan’s proposed 2026 tax reform similarly signals corporate and international tax changes that reflect the country’s competitiveness and economic goals. 

Regulatory authorities are likewise reinforcing transparency, oversight and investor protection. Brazil’s central bank has introduced a unified framework for virtual asset service providers, bringing the sector under a more coherent and FATF‑aligned prudential regime. China has updated its tax‑arrears disclosure rules, adding taxpayer protections and formal objection pathways to improve fairness and transparency. Denmark has expanded eligibility for tax‑favoured employee share compensation, extending incentives beyond startups to support a broader group of emerging companies seeking to attract and retain talent. Qatar has strengthened its WHT procedures by requiring alignment between filings, contracts and supporting documents, reinforcing documentation integrity and reporting accuracy. 

Across these developments, a clear pattern emerges: governments are placing greater emphasis on economic substance, digital transformation, transparency and stronger compliance ecosystems. For MNEs, the pace and breadth of change underscore the need for continuous monitoring, disciplined documentation and proactive adaptation to evolving requirements.