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Week in Tax: February 24– 28, 2025

Recent tax developments from around the globe for the week of February 24– 28, 2025

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March 3, 2025

KPMG Week in Tax—published weekly to provide an overview of tax developments as reported in TaxNewsFlash—includes summaries of select tax-related news followed by a full list of reports (more information can be found at the links provided). Highlights include:

  • Israel: The tax authority released draft guidance for public comment, detailing the criteria and requirements for the tax authority to provide certainty regarding cost-plus compensation for local research and development (R&D) centers and valuation of post-acquisition intellectual property (IP) sales. Read TaxNewsFlash
  • Hong Kong: The 2025-2026 budget maintains existing tax rates but introduces various proposals, including a 100% reduction in profits and salaries tax payable for 2024-2025, subject to a ceiling of HKD 1,500; enhancements to preferential tax regimes; and expanded tax agreements with 17 countries. Additionally, there are changes in property-related taxes, such as increased stamp duty thresholds and a progressive rating system for domestic properties, alongside a new 3% hotel accommodation tax effective January 1, 2025. Read TaxNewsFlash
  • United States: President Trump has signed a memorandum outlining plans to address foreign digital service taxes (DSTs) targeting U.S. companies, including potential tariffs and renewed investigations under the Trade Act of 1974 into DSTs from several countries. The memorandum also calls for scrutiny of EU regulations like the Digital Markets Act and Digital Services Act, and directs the Treasury Secretary to assess whether foreign taxes discriminate against U.S. entities, with findings to be included in a report on the OECD Global Tax Deal. Read TaxNewsFlash

United States

  • White House announces directive to counter digital service taxes (DSTs)
  • White House memorandum on U.S. tax and trade policies focuses on China
  • O’Donnell resigns as acting IRS Commissioner; Krause to serve until nominee is confirmed
  • U.S. Tax Court: U.S. parent company not allowed foreign tax credits under former section 902 and section 960
  • IRS provides tax relief for taxpayers affected by storms in Kentucky
  • KPMG report: Effective dates and early reliance requirements in proposed CAMT regulations
  • KPMG report: Partnership related-party basis adjustment transactions of interest

Read TaxNewsFlash-United States


Legislative Updates

  • House Ways and Means approves joint resolution to overturn digital asset information reporting regulations and two disaster-related tax bills; JCT descriptions
  • House passes 2025 budget resolution

Read TaxNewsFlash-Legislative Updates

Cooperatives

  • IRS reminder: March 3 deadline for farmers and fishers who did not make estimated tax payments

Read TaxNewsFlash-Cooperatives

Transfer Pricing

  • Denmark: Proposed amendments to Pillar Two law
  • EU: Public meeting of European Parliament Subcommittee on Tax Matters with European Commissioner responsible for tax
  • Israel: Consultation on draft guidance regarding local R&D centers and IP valuations
  • OECD: Consolidated report on Amount B
  • OECD: Report to G20 Finance Ministers and Central Bank Governors, recent developments in international tax cooperation
  • Slovakia: Proposed amendments to implement exchange of Pillar Two information between EU member states (DAC9)

Read TaxNewsFlash-Transfer Pricing

Americas

  • Canada: Tax provisions in 2025 budget (Alberta)
  • Saint Kitts and Nevis: Guidance on reduced VAT rate for first half of 2025

Read TaxNewsFlash-Americas

Asia Pacific

  • Australia: Consultation on draft legislation on 2025 tax return filing requirements
  • Australia: Guide correcting “common myths” about Division 7A
  • Australia: Guides on claiming critical mineral, hydrogen production tax incentives
  • Australia: Proposed increase in tax incentives for alcohol manufacturers
  • Australia: Ruling on taxation of bonuses paid to employees as part of sale transaction
  • Hong Kong: Tax proposals in 2025-2026 budget
  • India: Activities of Indian subsidiary did not create PE for Finish parent under Finland treaty (High Court decision)
  • Israel: Consultation on draft guidance regarding local R&D centers and IP valuations
  • Malaysia: New deadlines for e-invoicing compliance
  • New Zealand: Consultation on taxation of charitable and not-for-profit organizations
  • Saudi Arabia: Public consultation on draft regulations for real estate transaction tax
  • Sri Lanka: Proposed legislation includes VAT and income tax changes
  • Taiwan: Updated list of low-tax jurisdictions

Read TaxNewsFlash-Asia Pacific

Europe

  • Belgium: “Fairness tax” compatible with EU law (CJEU judgment)
  • Czech Republic: Overview of tax legislation valid in 2025
  • Denmark: Proposed amendments to Pillar Two law
  • EU: European Commission clean industrial deal to recommend adoption of tax incentives for “clean-tech” sector
  • EU: Public meeting of European Parliament Subcommittee on Tax Matters with European Commissioner responsible for tax
  • Germany: Application of trade tax addition to advertising expenses, tax policy implications of Parliamentary elections, other tax developments
  • Greece: New law introduces tax measures for tips, sole proprietorships, short-term rentals, and payment deadlines
  • Poland: Amendments to tax laws passed by lower house of Parliament
  • Poland: Proposed amendments to mandatory disclosure rules (DAC6)
  • Poland: Retroactive changes to depreciation rates; application of VAT split payment mechanism; special economic zone activities; no permanent establishment without profit (Supreme Administrative Court decisions)
  • Portugal: Municipal surcharges rates of corporate income tax for FY2024
  • Portugal: Tax measures in 2025 budget law
  • Serbia: Guidelines for 2024 individual income tax returns
  • Slovakia: Guidance on application of reduced VAT rate on accommodations, excise tax on electricity
  • Slovakia: Parliament considers proposed legislation to amend VAT law, reduce excise tax on fuels
  • Slovakia: Proposed amendments to implement exchange of Pillar Two information between EU member states (DAC9)

Read TaxNewsFlash-Europe

Trade & Customs

  • EU adopts 16th sanctions package against Russia
  • U.S. CBP extends Vessel Entrance and Clearance Automation Test
  • United States initiates Section 232 investigation into imports of copper
  • USTR requests comments on proposed Section 301 actions concerning China’s maritime and shipbuilding practices
  • White House announces directive to counter digital service taxes (DSTs)
  • White House memorandum on U.S. tax and trade policies focuses on China

Read TradeNewsFlash-Trade & Customs

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