Key highlights

OECD releases Side-by-Side Package on Pillar Two Global Minimum Tax: First impressions

On 5 January 2026, the Organisation for Economic Co-operation and Development (OECD) released a comprehensive package for a "side-by-side arrangement" with respect to the Pillar Two global minimum tax rules. The package includes Administrative Guidance that provides a new Simplified Effective Tax Rate Safe Harbor, a one-year extension of the Transitional Country-by-Country Reporting Safe Harbor, a new Substance-based Tax Incentive Safe Harbor and two Safe Harbors related to a Side-by-Side System. The agreement follows months of negotiations and effectively exempts United States (US) multinationals from most BEPS 2.0 Pillar Two global minimum tax rules, in recognition of US minimum tax rules.

Register now for the webcast: What to expect from global tax policy and controversy in 2026

The pace of global change is relentless, and decisions rarely occur in isolation. Leaders worldwide are navigating a complex web of competing priorities: driving economic growth while ensuring fiscal stability, balancing security needs against budget constraints, aligning with international partners while safeguarding national sovereignty and embracing technological innovation amid rising risks. These tensions converge in global tax negotiations, which increasingly reflect the interconnected and challenging nature of modern policymaking.

On 5 March 2026, join a panel of EY Tax Policy and Controversy leaders from around the world as they discuss what to expect in the year ahead. They will focus on significant tax legislative and administrative trends and highlight leading practices for businesses as they navigate change.

2025 Tax Risk and Controversy Survey shows AI is poised to make managing tax risk and controversy easier

Tax controversy is at an inflection point. While tax controversy continues to increase in both volume and length of time to settle disputes, both businesses and tax authorities are rushing to embrace technology including generative artificial intelligence (GenAI) in the hopes of alleviating burdens. There may soon be no looking back. The 2025 Tax Risk and Controversy Survey captures insights from 1,934 senior tax and finance executives representing 48 jurisdictions and 12 industries.

Key news

European Commission publishes provisional Implementing Acts and their Annexes regarding CBAM

The European Commission published, on 17 December 2025, a comprehensive set of provisional documents to establish the definitive Carbon Border Adjustment Mechanism (CBAM) regime, effective from 1 January 2026. Key provisions include the extension of CBAM to additional goods, enhanced anti-circumvention measures and the introduction of a Temporary Decarbonization Fund to support energy-intensive industries at risk of carbon leakage.

Estonia enacts significant tax changes

In 2026, Estonia will maintain its personal and corporate income tax rates at 22% instead of a planned increase to 24%. Effective 1 July 2025, the standard VAT rate has increased from 22% to 24%. This adjustment has now been established as a permanent increase, contrary to previous plans for a temporary adjustment lasting only three years.

Korea enacts 2026 tax reform bill

On 23 December 2025, Korea enacted the 2026 Tax Reform Bill, generally effective for fiscal years beginning on or after 1 January 2026. The bill includes a Qualified Domestic Minimum Top-up Tax of the global minimum tax rules to reflect the OECD BEPS 2.0 Pillar Two, a one-percentage-point increase in the corporate income tax rate and securities transaction tax rates increases, among other changes.