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New legislation in Cyprus targets payments made to entities resident in low-tax jurisdictions in addition to pre-existing rules relating to payments made to entities resident in countries included on the EU blacklist. The rules aim to tackle abusive arrangements using a combination of withholding tax and the disallowance of expenses.
Brazil, one of the few countries that does not tax dividends, has proposed a 10% withholding tax on dividends paid to nonresidents (both individuals and companies), which would apply as from 1 January 2026.
Transparency initiatives are underway in Saudi Arabia and the UK: all companies in Saudi Arabia must identify and disclose their ultimate beneficial owners and the UK tax authorities are holding a public consultation on a proposal for a dedicated service to provide binding advance clearances on major projects.
Other developments in the Middle East include a new incentive in Qatar that allows certain entities to receive a tax credit based on expenses, which will result in a nil tax liability and updated guidance on the UAE rules relating to tax groups, the participation exemption and PEs of foreign entities.
In Pillar Two news:
Brazil, one of the few countries that does not tax dividends, has proposed a 10% withholding tax on dividends paid to nonresidents (both individuals and companies), which would apply as from 1 January 2026.
Transparency initiatives are underway in Saudi Arabia and the UK: all companies in Saudi Arabia must identify and disclose their ultimate beneficial owners and the UK tax authorities are holding a public consultation on a proposal for a dedicated service to provide binding advance clearances on major projects.
Other developments in the Middle East include a new incentive in Qatar that allows certain entities to receive a tax credit based on expenses, which will result in a nil tax liability and updated guidance on the UAE rules relating to tax groups, the participation exemption and PEs of foreign entities.
In Pillar Two news:
- The EU DAC9 directive has been published, which facilitates compliance of large multinationals and domestic groups as set out in the EU Minimum Taxation Directive by allowing such groups to file a single top-up tax information return for the group.
- The Liechtenstein tax authorities have published a GloBE registration form.
- The UAE has adopted all OECD guidance on the GloBE rules as part of its domestic tax regulatory framework and we include an article in this issue assessing the first year of implementation of the Pillar Two rules and actions affected companies should be considering.
In this issue:
- Cyprus: Measures Targeting Low-Tax and Non-cooperative Jurisdictions Introduced
- United Arab Emirates: Key Action Steps for the First Year of Implementation of Pillar Two Rules
- Brazil: Withholding Tax on Dividends Remitted Abroad on the Horizon
- European Union:
- DAC9 Directive for the Exchange of Pillar Two Information in Effect
- CJEU Clarifies PSD Anti-Abuse Rule Regarding the Participation Exemption
- Hong Kong: 2025/26 Hong Kong Budget Highlights
- International:
- Corporate tax bytes
- Pillar Two Tracker Update
- Liechtenstein: Pillar Two GloBE Registration Launched
- Qatar: Beneficial Tax Credit Granted for Web Summit Entities
- Saudi Arabia: New Rules Require Identification of Beneficial Owners
- Singapore: What Businesses Need to Know About Corporate Tax Changes in Budget 2025
- United Arab Emirates:
- Regulations on Tax Grouping, Participation Exemption and Foreign PEs Updated
- OECD Guidance on Global Anti-Base Erosion Rules Adopted
- United Kingdom: Government Consults on Proposed Advance Tax Clearance Process for Major Projects
For more detailed information on any of the issues or how BDO can help, please contact Olivier Michiels or the country contributors directly.
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