BDO Corporate Tax News | AUGUST 2026
Key global tax developments
International tax developments are introducing new requirements concerning documentation, ownership transparency and the demonstration of economic substance. We have selected the changes that may also be relevant to Slovak companies operating in international markets.
EU proposes simplification of direct taxation rules
The European Commission has presented a package of proposals aimed at reducing administrative burdens and simplifying tax rules across the EU. The proposed changes cover cross-border dividends, interest and royalty payments, corporate restructurings, interest deductibility and tax support for research and development. These are proposals at this stage, and neither their final wording nor the timetable for adoption has been confirmed.
Germany reviews withholding tax relief for US hybrid structures
The German tax authorities continue to review eligibility for treaty-based withholding tax relief involving US check-the-box structures. Affected investors may face additional documentation requirements to demonstrate that a reduction in German withholding tax does not result in an inappropriate tax benefit in the United States. The German authorities have not yet adopted a final position.
German court confirms reduced withholding tax on dividends
Germany’s Federal Fiscal Court has confirmed that dividends paid by a German subsidiary to a US S corporation may, subject to the relevant conditions, qualify for a treaty rate of 5% or 0% rather than the 15% rate applicable to individuals. However, the refund claim must be filed by the individual shareholder.
Malta revises beneficial ownership reporting requirements
Malta has amended its beneficial ownership disclosure rules. Certain companies and other entities will need to review the accuracy of the information on record and comply with new reporting obligations. The changes are aligned with the EU’s developing anti-money laundering framework.
Switzerland extends the tax loss carryforward period
The Swiss Parliament has definitively approved an extension of the tax loss carryforward period from seven to 10 years. The new rules are expected to apply to losses incurred from the 2020 tax period onwards. The effective date will be determined by the Federal Council, with the amendment expected to enter into force no later than 1 January 2028.
UK plans mandatory foreign permanent establishment exemption
The UK government plans to replace the current elective regime with a mandatory exemption for foreign permanent establishments. Their profits and losses would be excluded from UK corporation tax calculations. Companies would therefore lose the ability to offset foreign branch losses against UK profits. For most companies, the new regime is expected to take effect from 1 January 2027.
Could these developments affect your company?
We can help you assess the impact of the new rules on cross-border transactions, holding and financing structures, withholding taxes, permanent establishments and other tax obligations.
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