What can you read about in the latest news from the world of international taxation? A double tax agreement between the Czech Republic and Argentina is entering the legislative process in both countries. The Court of Justice of the European Union ruled on the compatibility of certain parameters of Belgium's tax consolidation regime with the parent-subsidiary directive. The Cypriot government introduced a tax reform proposal, and the Hungarian financial administration published its tax audit plan for this year.
Throughout March 2025, delegations from the Czech Republic and Argentina agreed on the wording of the text for the double taxation agreement. The text will be forwarded into the national legislative process in both countries.
CJEU: Certain parameters of Belgium’s tax contribution regime are incompatible with the parent-subsidiary directive
In case C-135/24, the Court of Justice of the European Union determined that Belgium’s specific group contribution regime may, under certain circumstances, disrupt tax neutrality regarding income exemption from profit participation according to the parent-subsidiary directive. The court found that due to the method of including and then excluding exempt profit shares in settlements among tax consolidation members, a situation can arise where a group member with exempt dividend income faces higher taxation than another group member who did not realize these incomes. The court confirmed that the Belgian tax contribution regime can lead to indirect taxation of otherwise exempt profit shares, which is incompatible with the directive’s purpose regarding parent and subsidiary companies.
As a result of this decision, a change to Belgian tax law is necessary, which the Belgian government has already proposed. Until this change takes effect, Belgian tax entities should be able to seek a more favorable regime retroactively based on the direct effect of the parent-subsidiary directive. You can read more on our website.
Upcoming tax reform in Cyprus
At the end of February, a comprehensive tax system reform proposal in Cyprus was introduced. Throughout March, this proposal was subjected to public discussion, based on which amendments to the relevant laws will be prepared.
Key proposed changes include increasing the corporate income tax rate from 12.5% to 15% and reducing the defense contribution rate levied on profit participation income by Cypriot tax residents from 17% to 5%.
Other changes address support for ecological and digital transformation, for example, through super deductions, accelerated depreciation, or employee training expenses. In personal income tax, modifications to tax brackets are proposed, along with the introduction of tax deductions for parents with children and mortgage relief. There are also plans for more favorable taxation of employee stock plans. Additional measures include extending the time for applying tax losses to ten years and limiting stamp duty only to transactions related to real estate, banking, and insurance. You can read more about the planned changes on our website.
Hungarian financial administration’s tax audit plan in 2025
The Hungarian financial administration has published its tax audit plan for 2025. It will focus on companies financed by loans from related parties and those that have used “virtual office” providers for registration of their headquarters. Special attention will also be given to the area of transfer pricing, with plans to concentrate on large multinational groups.
Regarding industry focus, the financial administration will target tax entities operating in the automotive trade, security and cleaning services, IT, online sales, internet content provision, textile trade, wholesale of fruits and vegetables, construction services, tourist and accommodation services, import of goods, cosmetic and fitness services, and activities subject to excise tax.
Seminars, webcasts, business breakfasts and other events organized by Deloitte.
