The OECD released an updated version of the GloBE Information Return reflecting changes introduced by the Pillar Two side-by-side package. Luxembourg proposed the introduction of mandatory e-invoicing for domestic B2B transactions, with the first obligations applying from 2028. The German federal tax court referred to the CJEU the question of whether the 5% addback applied to tax-exempt merger gains from cross-border upstream mergers is compatible with the EU merger directive. You may find more information about these and other news in our article.
OECD: OECD Pillar Two – Updated version of GIR released
The OECD has released an updated version of the GloBE Information Return (GIR), incorporating changes resulting from the January 2026 side-by-side package. The revised GIR includes reporting requirements related to the new side-by-side safe harbour and the simplified effective tax rate safe harbour, as well as changes reflecting the extension of the Transitional CbCR safe harbour. It also incorporates other updates introduced as part of the January 2026 package.
In addition, the OECD has released an updated GIR XML schema and user guide to reflect the changes to the GIR. The revised materials are intended to support the reporting and exchange of information under the Pillar Two framework.
Belgian: Tax authorities clarify updated BEPS 13 transfer pricing forms and CbC reporting
The Belgian tax authorities have published additional technical and practical guidance on the updated BEPS 13 forms covering CbC notification, the master file and the local file, as well as certain aspects of CbC reporting. The deadline for the updated local file has been extended to 10 November 2026.
The updated local file requires, among other changes, a more detailed breakdown of cross-border transactions by business unit, country and transfer pricing method, as well as additional supporting documentation and identification information. For the master file, the authorities clarified new disclosure requirements concerning value chain analysis, DEMPE functions, hard-to-value intangibles and financing arrangements.
The authorities also confirmed a cumulative penalty framework across all four BEPS 13 forms and indicated a shift in enforcement from late or nonfiling towards systematic review of the quality of the information reported.
Italy: Pillar Two side-by-side package transposed into domestic law
Italy has transposed the OECD Pillar Two side-by-side package into domestic law. A decree published in the Official Gazette on 1 September 2026 incorporates the package, which was agreed by the OECD/G20 Inclusive Framework in January 2026, into Italy’s minimum tax rules.
The decree introduces the new side-by-side safe harbour and simplified effective tax rate safe harbour and reflects changes to the existing transitional CbCR safe harbour. It also includes provisions concerning the treatment of certain tax incentives and other amendments to Italy’s Pillar Two framework resulting from the OECD package.
Luxembourg: E-invoicing could become mandatory for domestic B2B transactions as from 2028
At the end of July 2026, the Luxembourg government submitted a draft bill introducing mandatory e-invoicing for domestic B2B supplies of goods and services. E-invoices would have to be issued in a structured electronic format and transmitted through a single network. Exempt financial, fund management and insurance services would not be subject to the requirement.
All businesses would have to be able to receive e-invoices from 1 January 2028. The obligation to issue them would be phased in: (i) starting on 1 July 2028 for large and medium-sized businesses and (ii) starting on 1 January 2029 for small businesses. The proposed rules are designed with the EU VAT in the Digital Age (ViDA) requirements in mind, including mandatory e-invoicing for EU cross-border B2B transactions from 1 July 2030.
Government approves draft Annual Tax Act 2026
On 12 August 2026, the German government approved the draft Annual Tax Act 2026. The bill includes key elements of the OECD Pillar Two side-by-side package, notably the side-by-side and UPE safe harbors, applicable for fiscal years starting after 31 December 2025, and a one-year extension of the transitional CbC reporting safe harbor.
Other measures include changes to withholding tax procedures, including an increase in the threshold for simplified royalty WHT relief from EUR 10,000 to EUR 100,000, as well as amendments concerning VAT consolidated groups, real estate purchase price allocation and the R&D tax credit. The draft bill will now proceed through the legislative process.
Federal tax court refers German tax treatment of cross-border mergers to CJEU
The German federal tax court has asked the CJEU to determine whether the 5% addback of deemed nondeductible business expenses on a tax-exempt merger gain arising from a cross-border upstream merger is compatible with the EU merger directive. Under German law, where a corporate subsidiary is merged into its corporate parent, the resulting merger gain is generally tax-exempt. However, 5% of the gain is added back as deemed non-deductible business expenses, resulting in an effective 95% rather than 100% participation exemption.
The case concerns a German company into which subsidiaries from several European countries were merged. The taxpayer argues that the EU merger directive does not allow the 5% addback. The federal tax court identified arguments supporting both positions and referred the issue to the CJEU for clarification.
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