E-News from KPMG’s EU Tax Centre

KPMG’s EU Tax Centre compiles a regular update of EU and international tax developments that can have both a domestic and a cross-border impact, with the aim of helping you keep track of and understand these developments and how they can impact your business. Today’s edition includes updates on:

• CJEU: CJEU ruling on the Portuguese real estate transfer tax on contributions and restructurings involving real estate companies
• Council of the EU: ECOFIN Council approves biannual report on tax issues
• European Commission: European Commission opens infringement procedure against Poland over incorrect transposition of the reporting rules under DAC7
• OECD: Consultation launched on proposed changes to reporting rules for digital platforms
• OECD: Country responses to OECD common understanding on central GIR filing 
• Cyprus: Clarifications on Pillar Two filing requirements published
• Netherlands: Updated Pillar Two Q&A published
• Portugal: Extension of GIR filing deadline
• Spain: Proposed revisions to list of non-cooperative jurisdictions
• Italy (court decision): Milan Tax Court rejects challenge to Luxembourg holding structure in indirect Italian capital gains case

CJEU ruling on the Portuguese real estate transfer tax on contributions and restructurings involving real estate companies

On June 4, 2026, the Court of Justice of the European Union gave its decision in case C-837/24 regarding the comparability of the Portuguese municipal real estate transfer tax (IMT) with Directive 2008/7/EC concerning indirect taxes on the raising of capital (the “Capital Duties Directive” or the “Directive”).

The Capital Duties Directive establishes a harmonized EU framework governing the taxation of transactions involving the raising of capital by companies. Under the Directive, Member States are prohibited from imposing indirect taxes on specific transactions, including contributions of capital (Article5(1)(a)) and certain reorganizations (Article5(1)(e)). Under Article 6(1) of the Directive, Member States are nevertheless allowed to levy certain taxes, including: duties on the transfer of securities (Article 6(1)(a)), transfer duties – including land registration taxes, on the transfer of businesses or immovable property to a capital company (Article 6(1)(b)), and transfer duties on assets transferred to a capital company where the consideration consists of something other than shares in that company (Article 6(1)(c)).

The plaintiff was a public limited company incorporated under Portuguese law and established through contributions in kind, made by its sole shareholder. Those contributions consisted of shareholdings in several other companies, including a limited liability company whose assets included two immovable properties. As a result of the asset contribution transaction related to its formation, the plaintiff acquired 100 percent of the shares in the real estate company and, consequently, indirect ownership of the two immovable properties.

Under Portuguese law, real estate transfer tax (Imposto Municipal sobre Transmissões Onerosas de Imóveis – IMT) is levied on transfers of immovable property for consideration. Its scope extends beyond direct transfers of real estate and, in certain circumstances, also captures indirect transfers through the acquisition of shares in companies holding immovable property. For IMT purposes, such share acquisitions are treated as transfers of the underlying real estate. In these cases, the IMT tax base is determined by reference to the value of the underlying property.

On that basis, and following a tax audit of the plaintiff’s shareholder, the Portuguese tax authorities took the view that the contribution in kind of shares in a real estate owning companies to the share capital of the plaintiff was subject to Portuguese IMT. The plaintiff challenged this position before the Portuguese Tax Arbitration Tribunal (Centro de Arbitragem Administrativa – CAAD), arguing that the relevant IMT provisions were in breach of the Capital Duties Directive. The Tax Arbitration Tribunal had doubts as to whether the Portuguese rules were compliant with the Directive and therefore referred several questions to the CJEU for a preliminary ruling.

Deviating from the AG’s opinion, the CJEU ruled that the Directive precludes national legislation imposing a tax on a restructuring operation that involves the formation of a capital company whose capital is fully paid up through contributions of shares in companies holding immovable property.

The Court clarified that the Directive prohibits Member States from applying indirect taxes on the contribution in kind of shares in companies owning immovable property upon the formation of a capital company, where that contribution qualifies as a restructuring operation within the meaning of the Directive.

The Court recalled that the Directive fully harmonizes the circumstances in which Member States may impose indirect taxes on the raising of capital and prohibits Member States from imposing such taxes on certain restructuring operations. The Court found that the formation of the plaintiff qualifies as a restructuring operation within the meaning of the Directive.

For more details, please refer to Euro Tax Flash Issue 581. 

European Commission closes infringement procedure against Romania over DAC9 transposition

On June 4, 2026, the European Commission (EC) announced that it has closed the infringement procedure against Romania for failing to fully transpose Directive (EU) 2025/872 (DAC9) into domestic law. DAC9 introduces the EU framework for the exchange of Top-up tax information returns filed by groups in scope of Pillar Two with the tax administration of an EU Member State. All EU Member States were required to implement DAC9 into domestic law by December 31, 2025. The infringement procedure, initiated on January 30, 2026, targeted Member States that had not fully implemented DAC9 into national law.

Romania completed its transposition through a bill published in the Official Gazette on January 30, 2026, leading the EC to close the procedure. However, infringement procedures remain open for the other notified countries, despite most of them having completed the implementation of DAC9 in 2026, pending final assessment by the European Commission.

For more details on DAC9 implementation, please refer to our E-News Issue 230.

European Commission opens infringement procedure against Poland over incorrect transposition of the reporting rules under DAC7

On June 4, 2026, the European Commission announced an infringement procedure against Poland for incorrectly transposing Directive 2021/514 amending Directive 2011/16/EU on administrative cooperation in the field of taxation (DAC7).

DAC7 introduces reporting and automatic exchange of information on income earned by sellers on digital platforms. To eliminate double reporting, DAC7 contains rules providing relief from the reporting obligations for non-EU platform operators. Non-EU platform operators can be completely exempt from DAC7-related registration and reporting in the EU where the non-EU jurisdiction is a ‘Qualified Non‑Union Jurisdiction’. According to the EC announcement, this means a non-EU jurisdiction that has in effect an Effective Qualifying Competent Authority Agreement (EQCAA) with all relevant Member State. An EQCAA means an agreement that allows Member States to receive equivalent information from non-EU jurisdictions that apply similar reporting regimes (e.g., based on the OECD’s Model Rules for Reporting by Platform Operators with respect to Sellers in the Sharing and Gig Economy). Determinations of equivalence – codified in a Commission Implementing Regulations, have been adopted for the United Kingdom, New Zealand, and Canada. 

According to the OECD overview of activated bilateral exchange relationships, not all EU Member States have activated the exchange relationships with those three jurisdictions under the Multilateral Competent Authority Agreement on Automatic Exchange of Information on Income Derived through Digital Platforms (DPI MCAA).

The EC announcement notes that Poland has not transposed DAC7 correctly into national law by granting relief from registration and reporting where an EQCAA exists only between that non-EU jurisdiction and Poland, without requiring activated exchange relationships with other EU Member States. As a result, the EC decided to issue a letter of formal notice to Poland, which is the first step of the infringement procedure.

Poland has a period of two months to submit its reply and take corrective action in relation to the issues identified by the EC. Otherwise, the Commission may decide to issue a reasoned opinion explaining why the Commission considers that Poland is breaching EU law and requesting Poland to inform the Commission of the measures taken, within a specified period (usually two months). If Poland still does not comply, the Commission may decide to refer the matter to the Court of Justice of the EU (CJEU), which may impose penalties if it finds Poland has breached EU law.

For more details, please refer to the Commission’s June 2026 infringement package. 

European Commission closes infringement procedure against Belgium for incorrect transposition of controlled foreign company provisions of ATAD

On June 4, 2026, the European Commission closed the infringement procedure initiated on July 2, 2020 against Belgium (INFR(2020)2215) concerning the incorrect transposition of the controlled foreign company (CFC) provisions of the Anti-Tax Avoidance Directive (ATAD).

Article 7 of the ATAD sets out the CFC rule, which requires Member States to tax the income of low-taxed controlled subsidiaries or permanent establishments (PEs) as if it were earned by the parent company or head office. The rule applies when the tax paid by the CFC or the PE is substantially lower than the corporate tax that would have been due on the same income in the Member State of the parent. In such cases, the income is attributed to the parent company and taxed in its jurisdiction.

Under the ATAD, Member States may choose between two approaches when implementing the CFC rules:

• Model A: applies the charge to non-distributed income of the CFC derived from specific categories of passive income – Article 7(2)(a).
• Model B: applies the charge to non-distributed income of the CFC arising from non-genuine arrangements which have been put in place for the essential purpose of obtaining a tax advantage – Article 7(2)(b).

Under Article 8(7) of the ATAD, Member States are required to allow a deduction for the foreign tax paid by a CFC against the domestic tax liability of the parent company resident in that Member State. Belgium had transposed the ATAD and had chosen Model B for the application of the CFC rules. However, Belgium had not transposed Article 8(7), arguing that its domestic legal framework provided more robust safeguards against tax avoidance by disallowing such deductions.

On April 19, 2023, the EC decided to refer Belgium to the CJEU for failing to correctly transpose the Directive (case C-524/23). On February 26, 2026, the CJEU found that Belgium’s failure to transpose the deduction required under Article 8(7) of the ATAD constitute a breach of its obligation to implement the Directive. for more details, please refer to Euro Tax Flash Issue 575.

Belgium has since amended its legislation and now provides for a foreign tax credit from tax year 2023 (assessment year 2024).

ECOFIN Council approves biannual report on tax issues

On June 12, 2026, the Economic and Financial Affairs Council (ECOFIN) approved a report to the European Council  which details progress made with respect to various tax-related initiatives under the Cypriot Presidency of the Council of the EU (first half of 2026).

Key takeaways from a direct tax perspective include:

• Tax decluttering and simplification: The report refers to the March 2025 ECOFIN Council conclusions on the tax decluttering and simplification agenda, which called for a review of existing legislation with the aim of eliminating outdated and overlapping rules, as well as enhancing clarity and consistency of EU tax legislation. In addition, the report refers to the 2026 Commission work program aiming to cut administrative burdens by 25 percent overall and 35 percent for small and medium enterprises (SMEs) through a new series of simplification initiatives, including a legislative proposal for an Omnibus on Taxation, which is expected to be published on June 24, 2026. Furthermore, the report notes that, in April 2026, the European Parliament, the Council of the European Union and the European Commission agreed on a roadmap to achieve ‘One Europe, One Market’ that includes a target to agree on the omnibus on taxation by the fourth quarter of 2027.
• Windfall profit taxes: According to the report, EU country delegations discussed national temporary tax measures to address the recent increases in energy prices (in particular, prices for imported fossil fuels) as well as the need for coordinated EU action. With respect to the latter, the report notes that delegations raised concerns regarding the potential impact on EU Member States’s budgets and the compatibility with national energy taxation system.
• OECD / United Nations: The report notes that EU country delegations were informed on the implementation of the January 2026 ‘Side-by-Side’ agreement, the state of play of the latest work on the implementation of the Pillar Two rules as well as other relevant workstreams of the Inclusive Framework on BEPS. The report further notes the progress made on the UN Framework Convention on International Tax Cooperation. Focus areas of the UN work include the taxation of income from cross-border services, and the prevention and resolution of tax disputes.
• Tax good governance: The report also notes that, in March 2026, the Commission updated EU country delegations on the negotiations on tax good governance provisions in EU agreements with non-EU countries.

Ireland will assume the Presidency of the Council on July 1, 2026 (for more information, please refer to the below summary).

ECOFIN Council approves Code of Conduct Group report

On June 12, 2026, the ECOFIN Council also approved the report on the progress of the Code of Conduct Group (Group) during the term of the Cypriot Presidency.

Update on the standstill and rollback review process in relation to preferential tax measures

Further to the last call for standstill and rollback notifications covering preferential tax measures, a number of regimes were notified by Member States, including measures in Belgium, Denmark, Ireland, Italy, Lithuania and Slovenia.

The Group concluded that several measures did not require assessment, including Denmark’s temporary increase in the depreciation base for eligible investments, Italy’s tax credit for investments in the Single Economic Zone and Slovenia’s tax incentive for Employee Stock Ownership Schemes.

In addition, the Group agreed not to assess Slovenia’s special tax rate for investment funds, as taxation of investment funds has not yet been addressed within the scope of the Code of Conduct.

Monitoring the actual effects of individual measures

As part of the monitoring of the actual effects of individual measures, the Group agreed to:

• continue monitoring Lithuania’s large-scale investment tax relief, and
• terminate monitoring Poland’s safe harbour rules for intra-group financing.

Update on the EU listing exercise and defensive measures against non-cooperative jurisdictions

The Group’s report further details the work performed with regards to the EU list of non-cooperative jurisdictions, including the most recent update that was approved by the ECOFIN Council on February 17, 2026 (see E-News Issue 226).

Additional takeaways from the Group’s report in relation to the EU listing exercise include:

• Criterion 1.2. (Exchange of information on request): According to the report, the OECD Global Forum published peer review outcomes for Belize (in-depth review) and Vanuatu (supplementary review), rating both jurisdictions as Largely Compliant. As a result, the CoCG will recommend removing Belize from Annex II and removing the reference to criterion 1.2 for Vanuatu in Annex I as part of the next update to the EU list in October 2026.
• Criterion 2.1. (No harmful preferential tax measures): The Council welcomes the progress made by jurisdictions in reforming their foreign-source income exemption regimes. Ongoing dialogue continues with jurisdictions such as Brunei Darussalam and Panama to ensure full compliance within the agreed deadline (i.e., June 30, 2026).
• Criterion 3.2. (Implementation of Country-by-Country reporting): The Group continued to assess jurisdictions’ compliance with the OECD CbCR standard. As part of the second annual monitoring exercise, at its meeting on April 27, 2026, the CoCG agreed to send letters to fourteen jurisdictions that received one or more general recommendations in the latest BEPS Inclusive Framework peer review (published on September 23, 2025) and had not activated CbCR exchange relationships with EU Member States. These letters request information on the existence of in-scope ultimate parent entities (UPEs) for 2025.
  This includes Fiji and Kuwait, which were reviewed for the first time in 2025 and received general recommendations.

Update on other workstreams

As regards other workstreams, discussions on expenditure-based tax incentives in Special Economic Zones did not progress during the Cyprus Presidency due to lack of consensus, and no revised guidance was adopted.

Priorities of the Irish Presidency of the Council

On June 10, 2026, the program note for the Irish Presidency of the Council of the EU (July 1 – December 31, 2026) was published. Key takeaways from a tax perspective include:

• Competitiveness and simplification: The Irish Presidency intends to prioritize work on the tax simplification agenda and aims to significantly progress and conclude the recast of the Directive on Administrative Cooperation (DAC). The Presidency aims to also progress work on the expected Tax Omnibus proposal.
• Anti-tax avoidance: The Irish Presidency will progress the work of the Code of Conduct Group (Business Taxation), including updating the EU list of non-cooperative jurisdictions for tax purposes in October 2026.
• Pillar Two: The Presidency aims to monitor the implementation of the Pillar Two Side-by-Side agreement at EU level and assess any impacts arising in a timely manner. The Presidency will also encourage the swift implementation by Member States of further simplification measures agreed at OECD Inclusive Framework level.
• Own resources: The Presidency aims to continue discussions on a possible revision of the own resources system in the context of the 2028-2034 Multiannual Financial Framework (MFF) negotiations.

Consultation launched on proposed changes to reporting rules for digital platforms

On June 15, 2026, the OECD launched a consultation on proposed amendments to the Model Reporting Rules for Digital Platforms.

The consultation document presents a set of proposed revisions, including:

• Revised thresholds for sellers of low-value goods: the OECD proposes to simplify the exclusion criteria by removing the current threshold of fewer than 30 transactions and increasing the monetary threshold from EUR 2,000 to EUR 3,000. The aim of the update is to reduce reporting obligations for occasional sellers.
• Clarification of the terms “Platform” and “Platform Operator”, as well as the related Commentary to address divergent interpretations observed in practice, including:
  • clarify that a “Platform” may consist of multiple functionally integrated components that together connect sellers and users (e.g., websites, mobile applications or systems), even where these components are operated by different entities acting within a single ecosystem.
  • clarifying that the notion of “Platform Operator” covers entities that make a platform available not only by providing direct technical access (such as accounts, user interfaces or APIs), but also by indirect means, including listing or offering services on behalf of sellers that do not themselves access the platform.
  • emphasizing that pure payment processors remain outside scope, where their role is limited to processing payments.
• Limitation of reporting for platform operators acting as sellers: the proposals introduce new reporting and due diligence rules for cases where a seller is itself a Reporting Platform Operator (including in a partner jurisdiction). In such cases, reporting would be limited to identification details and tax residence only, with no reporting of transactional data, to prevent duplicative reporting across multiple platform operators.
• Introduction of a “Related Entity” concept: a definition based on control (generally more than 50 percent ownership or voting rights) is introduced. Related entities of a Reporting Platform Operator would be treated as Excluded Sellers, thereby removing certain intra-group transactions from the scope of reporting.
• Additional measures under consideration for intermediary sellers: the OECD is exploring further amendments to ensure that intermediary structures (e.g., property managers or ride-hailing intermediaries) do not prevent reporting of underlying sellers. This could result in certain intermediary entities being treated as Platform Operators, creating cascading reporting obligations within platform ecosystems.

Interested parties are invited to provide feedback until August 14, 2026.

For more information, please refer to the OECD webpage.

Country responses to OECD common understanding on central GIR filing

On May 18, 2026, the OECD issued new guidance on central filing and exchange of the GloBE Information Return (GIR), with a common understanding among 33 of the 38 jurisdictions implementing the GMT for 2024 committing to waiving penalties and refraining from enforcing local GIR filing obligations (subject to domestic limitations) provided that the MNE centrally files its GIR in a listed jurisdiction and submits the required local notification. Notably, jurisdictions may require local filing if GIR information is not exchanged by December 31, 2026.

Since the release of the guidance, a number of jurisdictions have already confirmed their position with respect to the common understanding, including France, Italy, Portugal, Sweden and the UK (see E-News Issue 230). Additional EU countries that have recently issued statements in this context include:

Austria: On May 18, 2026, Austria issued guidance noting that the Austrian Ministry of Finance is expected to list the jurisdiction that have not activated the exchange relationship with Austria but where central GIR filing is considered sufficient for Austria to refrain from enforcing local GIR filing (in accordance with the OECD common understanding). In addition, the guidance notes that Austrian group members will be required to file the GIR for the fiscal year 2024 domestically no later than January 31, 2027, in case there is no active exchange relationship between Austria and that other state by December 31, 2026. The guidance also confirms that the central filing approach can be applied even where a country has failed to transpose DAC9 into national law by June 30, 2026.

Belgium: On June 8, 2026, Belgium issued a statement confirming that it will apply the OECD common understanding on central GIR filing. However, Belgium reserves the right to require local filing if the exchange does not occur by December 31, 2026. Where local GIR filing is required after year-end, the statement notes that Belgium will communicate this in a timely manner and set a deadline for the filing. The statement also confirms that the central GIR filing approach also applies with respect to EU countries that have not yet transposed DAC9 into national law. For more details on Belgian Pillar Two filing requirements, please refer to the below summary.

Cyprus: On June 15, 2026, the Cypriot tax administration published the forms and accompanying instructions to comply with the filing obligations under Pillar Two in Cyprus, including a confirmation that Cyprus will apply the OECD common understanding on central GIR filing. For more details, please refer to the below summary.

Czechia: The Czech tax administration issued a press release confirming that Czechia will apply the OECD common understanding on central GIR filing. For more details, please refer to a report prepared by KPMG in Czechia.

Germany: On May 18, 2026, the German Federal Tax Office issued a statement confirming that Germany will apply the OECD common understanding on central GIR filing.

Netherlands: On June 16, 2026, updated non-binding guidance in the form of a Q&A document was issued by the tax authorities in the Netherlands confirming, inter alia, that the Netherlands will apply the OECD common understanding on central GIR filing. According to the Q&A, the Netherlands will waive penalties provided that the MNE centrally files its GIR in a listed jurisdiction by December 31, 2026, and submits the required local notification.

QDMTT and IIR returns for fiscal years 2024 and 2025 published and GIR notification extended

On June 1, 2026, Belgium published a Royal Decree establishing the official template for the Qualified Minimum Top-Up Tax (QDMTT) return for assessment year 2024. The form applies to fiscal years starting on or after December 31, 2023, and ending no later than December 30, 2024. As a reminder, under the original rules, the QDMTT return was due 11 months after the end of the relevant fiscal year. For the first fiscal year (FY 2024), the Belgian tax authorities have granted an extension to September 30, 2026. For more information on filing deadlines, please refer to E-News Issue 228.

Subsequently, on June 15, 2026, Belgium also published:

• the QDMTT return template for fiscal year 2025, and
• the Income Inclusion Rule (IIR) top-up tax return templates for fiscal years 2024 and 2025.

The IIR return will follow the same filing deadline of September 30, 2026. However, as at June 18, 2026, the XML schema and filing portal were not yet available in Belgium, and further technical guidance was expected.

In addition, the Belgian Tax Authorities announced on June 12, 2026, that the GIR notification must be submitted by September 30, 2026, for both fiscal years 2024 and 2025. This notification—identifying the entity responsible for filing the GIR—is expected to be submitted via an online portal opening on July 1, 2026, with further practical details to follow. The extension only applies to the GIR notification and not to the GIR itself that is still to be filed by June 30, 2026.

For more details, please refer to the following reports prepared by KPMG in Belgium covering QDMTT 2024 and IIR/QDMTT.

Omnibus tax bill published in the Official Gazette

On June 1, 2026, an omnibus tax bill introducing various tax measures, including higher withholding tax rates for SMEs and adjustments to the liquidation reserve was published in the Official Gazette in Belgium. Focusing on corporate direct tax aspects, the bill includes the following measures:

• Liquidation reserve regime: Distributions from the liquidation reserve after a three-year period will be taxed at 9.8 percent instead of 6.5 percent, for liquidation reserves set up for financial years ending on or after December 31, 2025.
• Withholding tax on dividends paid by SMEs: The withholding tax rate on dividends distributed by SMEs under the “VVPRbis” regime¹ increases from 15 percent to 18 percent for distributions made after a three-year holding period, effective July 1, 2026.

For more details, please refer to a report prepared by KPMG in Belgium.

Clarifications on Pillar Two filing requirements published

On June 15, 2026, the Cypriot tax administration published an announcement along with the forms to comply with the filing obligations under Pillar Two in Cyprus.

• GIR: The GIR xml schema has been made available and aligns with the GIR materials published by the OECD in January 2025. The GIR must generally be submitted by all Cypriot Constituent Entities or a Cypriot Designated Filing Entity (on behalf of all Cypriot entities), unless it is filed in another jurisdiction and exchanged with Cyprus (under DAC9 or the GIR MCAA). In accordance with the OECD common understanding (published on May 18, 2026), Cypriot Constituent Entities are exempt from local GIR filing, if the GIR is submitted in another EU Member State or in a qualifying third country included in the OECD list.
• GIR notification: Where the GIR is field by a foreign Constituent Entity, a notification must be submitted to the Cypriot tax authorities identifying the filing entity and its jurisdiction (Form T.D. 331). The notification can also be filed by a local designated filing entity on behalf of all local group members (Form T.D. 333).
• Local IIR top-up tax return: A local tax return for IIR purposes has also been made available. The form requires general information (e.g., identification of group, Ultimate Parent Entity, GIR-filing entity) and a declaration of the amount of IIR top-up tax payable to be provided but does not require the disclosure of detailed IIR, UTPR, or QDMTT calculations. The local IIR top-up tax return is required also in cases where no top-up tax is payable in Cyprus. As a reminder, Cyprus does not apply a DMTT from 2024 and therefore does not require a local DMTT tax return.

The deadline for GIR filing and GIR notifications is generally 15 months after the end of the fiscal year (18 months for the transitional year). The deadline for the local IIR top-up tax return and settlement of top-up tax liability is within 30 days of the GIR filing deadline. However, for fiscal year 2024, the announcement confirms that no administrative penalties will be imposed provided that all compliance obligations are fulfilled by September 30, 2026. 

For more information details, please refer to a report prepared by KPMG in Cyprus.

Updated Pillar Two Q&A published

On June 16, 2026, updated non-binding guidance in the form of a Q&A document was issued by the tax authorities in the Netherlands.

The Q&A document contains a total of 158 questions and answers. Compared to the previous version (see E-News Issue 217), 70 new questions have been added. In addition, 88 existing questions were re-evaluated: 61 were adjusted for editorial or technical reasons (these are not marked as updated), 23 were editorially clarified, and four underwent substantive changes.

The guidance provides new or substantively changed clarifications on different aspects of the Pillar Two rules in the Netherlands, including on:

• selected adjustments to GloBE Income and Covered Taxes,
• treatment of Pillar Two Joint Ventures,
• application of the transitional Country-by-Country Reporting Safe Harbour,
• treatment of deferred tax attributes upon transition,
• completion of the GIR and application of the central GIR filing approach.

It is noted that the Q&A document is not exhaustive and will be updated regularly to incorporate new questions and answers as well as new insights with respect to existing answers. In addition, it is clarified that the Q&A document is subject to any relevant changes in legislation, policy, or future administrative guidelines published by the OECD or the European Commission.

Extension of GIR filing deadline

On June 3, 2026, the Portuguese tax administration issued an order extending the deadline for filing the GIR and top-up tax local returns for the 2024 fiscal year from June 30 to September 30, 2026, for in-scope groups with fiscal years ending between December 31, 2024, and March 31, 2025. 

Proposed revisions to list of non-cooperative jurisdictions

On May 22, 2026, the Spanish Ministry of Finance published a draft order to amend the list of jurisdictions that are considered to be non-cooperative or to have harmful tax regimes (for previous coverage, please refer to in E-News Issue 171).

As a reminder, the Spanish list is based on the following assessment criteria for non-EU jurisdictions:

• results of the peer review performed by the Global Forum on the effectiveness of the exchange of tax information;
• lack of an effective exchange of tax information with Spain;
• absence of a legal framework (e.g., mutual assistance agreements) in respect of the information exchange for tax purposes;
• existence of harmful tax regimes;
• existence of tax regimes that facilitate offshore structures which attract profits without real economic activity or through the existence of low or zero taxation or through their lack of transparency.

As a result, the Spanish list is not entirely aligned with the EU list of non-cooperative jurisdictions.

The draft order proposes the removal of Barbados, Dominica, Gibraltar, Seychelles, Trinidad and Tobago, and Samoa. In addition, the draft order proposes to add the Russian Federation in light of its international holding companies regime that has been deemed to be harmful.

As a result, the Spanish list would include the following 19 jurisdictions and territories: Anguilla, Bahrain, Bermuda, Fiji, Guam, Guernsey, Isle of Man, Cayman Islands, Falkland Islands, Mariana Islands, Solomon Islands, Turks and Caicos Islands, British Virgin Islands, US Virgin Islands, Jersey, Palau, American Samoa, Vanuatu and the Russian Federation.

The changes will apply from the day after publication in the Official State Gazette, while the inclusion of the Russian Federations will take effect six months after the publication date.

For more information, please refer to tax alert prepared by KPMG in Spain. For an overview of defensive measures adopted by EU Member States against non-cooperative jurisdictions, please refer to KPMG’s dedicated summary.

Belgian Court of Appeal of Antwerp confirms share deal capital gains exemption despite restructuring

On February 3, 2026, the Court of Appeal of Antwerp (the Court) issued a decision (2024/AR/808) concerning the application of the participation exemption on capital gains on shares in a case involving an alleged abusive restructuring.

The case concerned a Belgian holding company that realized a capital gain on the sale of shares in a subsidiary owning real estate. Prior to the sale, the group had carried out a partial demerger separating the operational activities from the real estate. The tax authorities denied capital gain exemption under domestic law, arguing that the transaction constituted an artificial arrangement intended to convert a taxable real estate gain into a tax-exempt share gain.

The Court rejected the position of the tax authorities and upheld the first-instance judgment annulling the assessment. In its decision, the Court held that the restructuring was part of a broader, pre‑existing reorganization with genuine business purposes, including separating real estate from operations, improving financing capacity, and enabling reinvestment. The proceeds were effectively reinvested, confirming the economic substance of the transaction.

Importantly, the Court stressed that the holding company never owned the real estate directly, meaning that a direct taxable real estate gain could not have arisen at its level. It also noted that the share deal ensured contractual continuity and reflected normal market practice.

The Court concluded that the restructuring had substantive economic motives and did not constitute an artificial arrangement. The tax authorities failed to prove that the main purpose of the transaction was tax avoidance. Consequently, the anti-abuse rule under Article 203 of the Belgian Income Tax Code (ITC), which implements the anti-abuse provisions of the Parent-Subsidiary Directive and targets, inter alia, the abusive application of the withholding tax exemption, the dividends received deduction, and the capital gains exemption regime, was considered not to apply. For similar reasons, the Court also dismissed the application of the general anti-abuse provision in Article 344 of ITC², confirming that the taxpayer had sufficiently demonstrated non-tax motives for the restructuring.

Italian Supreme Court holds that taxing dividends paid to nonresident non-commercial entities less favorably than dividends paid to resident NCEs breaches EU law

On May 26, 2026, the Italian Supreme Court issued decision no. 16281 on the compatibility of the withholding tax treatment of payments to a non-resident charitable trust with EU law.

The Court found that applying a higher withholding tax to dividends paid to non-resident non-commercial entities (NCEs) than to comparable Italian NCEs breaches the EU free movement of capital, where their situations are objectively comparable. The Court also held that the assessment of comparability must be based on the entity’s actual functions and purposes, rather than on formal attributes such as legal form, governance structure, or tax residence. In the Court’s view, a foreign charitable trust may be considered functionally equivalent to an Italian foundation or NCE, given their shared philanthropic purposes and asset segregation.

The Court further noted that the trust’s taxability in its country of residence, and the extent to which it is effectively taxed there, are not relevant for Italian tax purposes. Moreover, the mere holding of shares does not amount to a commercial activity and does not affect the entity’s non-commercial status.

For more details, please refer to a tax alert prepared by KPMG in Italy.

Milan Tax Court rejects challenge to Luxembourg holding structure in indirect Italian capital gains case

On September 5, 2025, the Milan First Instance Tax Court (the Court) issued decision (no. 3525), providing guidance on the Italian tax treatment of capital gains arising from indirect disposals of Italian companies held through foreign holding structures.

The case concerned an international private equity investment in an Italian company operating in the pet care sector, held through a two-tier Luxembourg holding structure. The transaction was carried out through the disposal of an intermediate Luxembourg entity, resulting in an indirect transfer of the Italian target.

Following a tax audit, the Italian Tax Authorities challenged the taxpayer’s failure to file a tax return and pay tax on the capital gain, which would have been taxed at 26 percent. The authorities argued that the Luxembourg entities were fictitious interposed companies established solely to allow the transaction to benefit from the capital gains exemption available in Italy under Article 13 of the Italy–Luxembourg double tax treaty. In particular, they claimed that the entities lacked sufficient economic substance and acted as conduit companies, with the capital gain effectively attributable to the fund as the ultimate investor.

The Court rejected this position. In its analysis, it carried out a substance-based assessment of the role and activities of the Luxembourg holding companies and concluded that they could not be regarded as artificial arrangements. In particular, the Court noted that: (i) the entities had an organizational structure, including premises and personnel, consistent with their holding activities; (ii) governance processes were effectively implemented, including regular board and shareholder meetings; (iii) key strategic decisions, including investment and distribution decisions, were made at the level of the holding companies and properly documented; and (iv) there was no evidence of automatic income flows to the ultimate investor.

On this basis, the Milan Tax Court rejected the Italian Tax Authorities’ position and held that the holding companies, which had sufficient substance and exercised autonomous decision-making functions, could not be disregarded for Italian tax purposes.

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