What are the novelties in double taxation treaties? How does the European Union plan to support start-ups? What changes in the area of taxes await Poland and France? You will find answers to these questions and more in our article.
The Ministry of Finance of the Czech Republic has published an amendment to the double taxation treaty between the Czech Republic and Germany in the Financial Bulletin. Based on this change, the minimum standard resulting from the Multilateral Convention on the Implementation of Measures to Combat Base Erosion and Profit Shifting in Relation to Tax Treaties (“MLI”) will be applied to the treaty. In the case of withholding tax, this adjustment will apply to events occurring from 1 January 2026, and for other taxes to the period starting on or after 1 January 2026.
The European Union has unveiled a new optional EU legal framework, known as the “28th legal regime“, which the European Commission is expected to present at the turn of 2025 and 2026. This regime should allow innovative start-ups and scale-ups to operate across the EU under a single set of rules, without having to deal with and comply with different laws across Member States. The aim is to simplify the rules in force and reduce the costs associated with failed projects. The rules should include elements of corporate, insolvency, labour and tax law. The use of this new legal regime would be optional. Work on this initiative is still at the beginning, the specific tax elements that the initiative should cover are not yet clear, and the implementation will require agreement at the level of all EU Member States.
The Polish Ministry of Finance plans to increase the corporate tax rate for banks and adjust the sectoral tax paid by financial institutions. The income tax rate for banks would rise from the current 19% to a target of 23% from 2028. However, in a transitional period, the rate would be gradually increased above the target level. It would be 30% in 2026 and 26% in 2027. At the same time, it is proposed to gradually reduce the sectoral tax rate by 10% in 2027 and to reduce it further by 20% from 2028 compared to the current rate (the current tax rate is 0.0366% and applies to the total value of assets exceeding PLN 4 billion for banks and PLN 2 billion for insurance and reinsurance companies).
Poland has also started a discussion on the introduction of a digital services tax, which should target multinational corporations operating in this sector with global revenues exceeding €750 million. This tax would apply to revenues from digital platforms, targeted advertising and activities related to the use of data. The Polish Ministry of Digitization is considering two options:
This is the second attempt to introduce a digital services tax in Poland (the first proposal in 2021 failed already at the public comment stage).
The British Virgin Islands has approved an amendment to the Mutual Legal Assistance in Tax Matters Act, which strengthens their international tax cooperation. The amendment introduces a clearer definition for financial institutions obliged to report and expands the punishable offences.
In its preliminary ruling, the German Federal Court expressed doubts about the legality of the double imposition of real estate transfer tax, which is technically allowed by the legislation in the case of the transfer of a share in a company of which real estate is a part, if the contract on the transfer of shares and the conclusion of the transaction do not take place on the same day. Both of these moments can lead to the imposition of real estate transfer tax if the notification is not properly filed with the relevant tax authority.
In the case under review, the share transfer agreement was signed on 11 March 2024 and the transaction was concluded on 29 March 2024. The notary informed the tax office about the signing of the share transfer agreement, but the relevant notification regarding the real estate transfer tax was not filed. The tax office thus assessed the tax at both moments, against which the taxpayer filed an appeal.
The German Federal Court preliminarily took the view that the prioritisation of the moment of conclusion of the transaction over the signing of the contract should apply for the purposes of assessing the transfer tax irrespective of whether the two events occurred on the same day or whether a certain period of time elapsed between the signing of the contract and the transfer. In its decision, the court also took into account the fact that the tax office was informed of the transaction and was aware of the facts (regardless of the absence of a specific reporting obligation) and preliminarily questioned the legitimacy of the “double” imposition of real estate transfer tax.
In the guidance, the Luxembourg tax administration specifies the scope of the provisions of the Luxembourg Income Tax Law, which address the issue of reverse hybrid mismatches (i.e. hybrid legal entities). The aim of the guidance is to determine which investment entities may be exempted from the scope of these rules. Funds may be exempted if they qualify as a collective investment entity while meeting the following criteria:
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