Global Updates – April 2026

Argentine tax authority (Agencia de Recaudación y Control Aduanero /ARCA) has released the updated tax brackets reflecting inflation adjustments. The corporate income tax rates apply from January 1, 2026, while the individual income tax rates apply for the period January to June 2026 (with revised rates for July to December 2026 expected later in the year).

The updated corporate income tax brackets are as follows:

Financial Year 2026			Financial Year 2025
Taxable Income (ARS)	Tax Due on Lower Limit(ARS)	Marginal Rate on Excess (%)	Taxable Income (ARS)	Tax Due on Lower Limit (ARS)	Marginal Rate on Excess (%)
0 – 133,514,185.74	0	25%	0 – 101,679,575.26	0	25%
133,514,185.74 – 1,335,141,857.38	33,378,546.43	30%	101,679,575.26 – 1,016,795,752.62	25,419,893.82	30%
Over 1,335,141,857.38	393,866,847.93	35%	Over 1,016,795,752.62	299,954,747.02	35%

The updated individual income tax brackets are as follows:

January to June 2026		July to December 2025
Taxable Income (ARS)	Rate (%)	Taxable Income (ARS)	Rate (%)
0 – 2,000,030.09	5%	0 – 1,419,669.59	5%
2,000,030.09 – 4,000,060.17	9%	1,419,669.59 – 2,839,339.18	9%
4,000,060.17 – 6,000,090.26	12%	2,839,339.18 – 4,259,008.77	12%
6,000,090.26 – 9,000,135.40	15%	4,259,008.77 – 6,388,513.15	15%
9,000,135.40 – 18,000,270.80	19%	6,388,513.15 – 12,777,026.30	19%
18,000,270.80 – 27,000,406.20	23%	12,777,026.30 – 19,165,539.45	23%
27,000,406.20 – 40,500,609.30	27%	19,165,539.45 – 28,748,309.18	27%
40,500,609.30 – 60,750,913.96	31%	28,748,309.18 – 43,122,463.77	31%
60,750,913.96 and above	35%	43,122,463.77 and above	35%

Implication:

The increase in corporate tax thresholds may lead to a lower effective tax burden for companies. For individuals, higher thresholds may result in reduced income tax withholding for employees. Employers should update their payroll processes to give effect to changes in personal tax brackets

Argentina: Labor Modernization Law enacted introducing wide-ranging labour reforms.

On March 6, 2026, Law No. 27,802 was published in the Official Gazette, thereby promulgating the Labor Modernization Act. The reform is broad in scope and introduces changes not only to the Employment Contract Law (Law No. 20,744), but also to more than 15 labour statutes, certain tax laws, labour procedural rules, collective bargaining rules, and special employment regimes. Certain special regimes will be repealed from January 1, 2027, while most other provisions became effective from March 6, 2026, except where a deferred implementation date is expressly provided.

The key changes include:

Amendments to the Employment Contract Law
- The rules for recognising prior seniority on rehire have changed. If more than 2 years elapse between termination and rehire by the same employer, prior seniority will no longer be recognised.
- Labour books and records must now be retained for 10 years, and digital records are expressly permitted, with the same legal validity as paper originals.
- Where an employer changes the form or modality of work and the employee considers the change materially harmful, the employee may treat the contract as terminated but may not require restoration of the prior working conditions.
- The employer’s obligation in relation to employment certificates is deemed satisfied when the certificates are made available physically at the workplace or in digital format.
- Employers may provide dynamic compensation made up of fixed or variable components designed to reward performance, without such components becoming acquired rights.
- Salaries may be paid in local or foreign currency, and employer-paid mobile phone or internet expenses for work purposes are not considered remuneration.
- Wages must be deposited into a bank account at no cost to the employee. Payment by cheque or transfer to digital wallet accounts is not permitted.
- Pay slips may be issued in paper, digital, or electronic form.
- Vacation may be split into periods of not less than 7 days by mutual agreement. At least one vacation period during summer must be granted once every 3 years, and 30 days’ notice is required if scheduled unilaterally by the employer.
- A bank of hours system is introduced, allowing longer workdays of up to 12 hours to be offset by equivalent rest, subject to statutory limits and proper record-keeping.
- For non-work-related illness or accident, medical certificates must now contain diagnosis, treatment, prescribed rest, and be digitally signed by a licensed medical professional. A medical board may be convened at the employer’s expense in case of disagreement.
- Employees may now resign via physical or digital telegram.
- Severance for dismissal without cause is clarified. The base excludes non-regular items such as vacation bonuses, 13th salary, and irregular bonuses. For highly compensated senior employees, a cap of 67% of the highest monthly remuneration applies, following Supreme Court precedent. Severance remains one month’s salary per year of service or fraction greater than 3 months, and the law states that severance is the sole remedy, excluding additional claims once paid.
- Labour judgments may be paid in instalments: up to 6 instalments for large companies and up to 12 instalments for SMEs.
Labor Assistance Fund (FAL)
The law creates a mandatory Labor Assistance Fund (FAL) to help guarantee the payment of labour severance. Employers must contribute monthly:
- 1% of payroll for large companies; and
- 2.5% of payroll for micro, small, and medium-sized enterprises.
The fund will be channelled through ARCA and administered by an entity authorised by the National Securities Commission. Employers may use the FAL, in whole or in part, to satisfy severance obligations, or may choose to pay severance without using the fund.
Amendments to Labour Procedural Rules
The law also amends the procedural framework applicable before the National Labour Courts, including:
- Limits on fees payable to medical and psychological experts.
- Amendments to jurisdictional and competence rules.
- Changes to recusals and challenges of judges, clerks, arbitrators, and experts.
- Replacement of ex officio progress of the procedure with party-driven impulse, including the possibility of declaring proceedings abandoned.
- A requirement that plaintiffs file all supporting evidence with the complaint; and
- An obligation for labour judges to follow Supreme Court precedents, with deviation potentially constituting grounds for removal.
Collective Labour Disputes and Essential Services
The law expands the list of essential services and creates a category of activities of “transcendental importance.” In the event of a strike:
- Essential services must maintain 75% service levels; and
- Activities of transcendental importance must maintain 50% service levels.
Essential services now include, among others, education, energy transport, hospital and pharmaceutical services, aeronautical operations, telecommunications, and waste collection. Activities of transcendental importance include passenger transportation, radio and television services, customs and immigration, continuous industrial processes, banking, and the food production chain.
Domestic Workers Regime
The probationary period for domestic workers is extended to six months, aligning it with the general regime. The law also introduces rules for rest periods, duties of the parties, and updating of labour credits.
Services Provided Through Digital Platforms
The law creates a specific legal regime for persons providing services through digital platforms, who are expressly excluded from the Employment Contract Law. The regime recognises freedom of connection and sets out rights and obligations for both platforms and independent service providers.
Collective Bargaining Agreements
The law amends the collective bargaining regime and eliminates the ultra-activity of collective bargaining agreements. Once a CBA expires, only its normative clauses remain in force, while obligatory clauses do not. It also:
- Sets a contribution cap of 0.5% of remuneration for employer organisations;
- Caps union solidarity contributions at 2%; and
- Provides that a narrower-scope agreement (for example, at the company level) prevails over a broader-scope agreement, regardless of whether it is earlier or later in time.
Trade Union Associations
The law requires prior employer authorisation for employee or delegate assemblies, and employers are not required to pay wages for the duration of such assemblies.
Incentive and Formalisation Regimes
The law introduces several schemes designed to promote formal employment and investment, including:
- A Basic Labour Training Program aimed at developing minimum competencies for labour market participation;
- A Labor Formalization Incentive Regime (RIFL) providing reductions in employer social security contributions for new hires;
- A Registered Employment Promotion Regime (PER) aimed at regularising unregistered employment, including the extinguishment of penalties and the forgiveness of social security debts; and
- A Medium-Sized Investment Incentives Regime (RIMI) to encourage investment and job creation.
Tax and Cost Reduction Measures
The law also includes certain tax-related measures aimed at reducing distortions and improving competitiveness, such as:
- VAT exemptions for electricity used in agricultural irrigation;
- Amendments to income tax rules, including CPI-adjusted loss carry forwards, certain exemptions for real estate leases and sales, updated valuation rules for feedlot operations, and clarification that investment-based naturalisation does not automatically create tax residency;
- Elimination of certain excise taxes affecting insurance, mobile and satellite services, luxury goods, vehicles, vessels, and aircraft; and
- Changes to INCAA’s financing model, which will now depend exclusively on national budget allocations.
Repeals and Reorganisation
The law repeals several special labour regimes, including those relating to journalists, travelling sales representatives, teleworkers, certain agricultural workers, and artisanal fishers. It also repeals provisions inconsistent with the new regime and restructures certain cultural and media entities.
Transfer of Labour Jurisdiction to the City of Buenos Aires
The law incorporates the agreement for the transfer of labour judicial authority from the National Labour Courts to the Labour Courts of the City of Buenos Aires. The transfer will be gradual, involving reallocation of resources, and the city must operationalise its labour courts within 180 days. During the transition, the national courts will retain jurisdiction over existing cases until final judgment. New cases will be filed before the City’s courts once operational, except for matters that remain under national or federal jurisdiction.

Implication:
Employers should review employment contracts, HR policies, payroll practices, severance planning, outsourcing arrangements, and collective labour frameworks to assess the impact of the new rules.

canada

Canada: Highlights of the British Columbia budget 2026

British Columbia Finance Minister Brenda Bailey presented the province budget for 2026 on February 17, 2026.

The key highlights of the budget 2026 are as follows:

For individuals

The personal income tax rate for the lowest tax bracket increased to 5.6% from 5.06%. The rate used for personal tax credits will also rise to 5.6%.

Taxable Income Thresholds (CAD)	Tax Rate 2026	Tax Rate 2025
Up to 50,363	5.60%	5.06%
50,364 to 100,728	7.70%	7.70%
100,729 to 115,648	10.50%	10.50%
115,649 to 140,430	12.29%	12.29%
140,431 to 190,405	14.70%	14.70%
190,406 to 265,545	16.80%	16.80%
Over 265,545	20.50%	20.50%

The budget proposes to freeze the personal income tax brackets and non-refundable tax credits at their 2026 levels for the years 2027 to 2030. Previously, these amounts would increase every year due to the increase in inflation.
Starting from 2026, the maximum tax reduction credit rises to CAD 690 (up from CAD 575). Taxpayers with net income under CAD 25,570 will receive the full credit, while those with income below CAD 44,950 will qualify for a partial credit.
A new children and youth disability supplement of up to CA 6,000 will be added to the Family Benefit starting July 1, 2027. Eligibility will be based on qualification for the federal disability tax credit.

For businesses

Corporate income tax rates – The budget does not propose any change in the corporate income tax rates and the threshold for classification as A small business unit. The general corporate income tax rate in British Columbia remains unchanged at 12%.
Scientific research and experimental development (SR&ED) tax credit – The budget amends the SR&ED tax credit to align with proposed federal Bill C-15. The expenditure limit is proposed to increase to CAD 6 million (from CAD 3 million), and capital expenditures will also be eligible for benefit. The budget makes this SR&ED credit as a permanent benefit by removing the expiry date.

Provincial sales tax (“PST”) on professional services.

Starting from October 1, 2026, certain professional services will be subject to the 7% PST. This includes accounting and bookkeeping; architectural, engineering, and geoscience services (with 30% of the service cost taxed); rental property and strata management services; commission on buying and selling non-residential real estate; and security and private investigation services. Businesses providing these services will be required to register, collect, and remit PST.

Implication:
The employers should take note of changes to personal tax rates and personal tax credits. Businesses should assess the impact of 7% PST on various services.

Canada: Highlights of the Quebec budget 2026

Quebec’s Finance Minister Eric Girard presented the province’s budget for 2026 on March 18, 2026.

The key highlights of the budget 2026 are as follows:

For businesses

Corporate income tax rates – The Budget does not propose any change in the corporate income tax rates. The general corporate income tax rate in Quebec remains unchanged at 11.5%.
Tax credit for development of e-business (“TCEB”) – TCEB provides refundable and non-refundable tax credit to businesses engaged in software and IT solution development. The budget makes amendments to TCEB regime to update it to the tax credit for development of e-business integrating artificial intelligence (TCEBAI) regime. Key changes include:
- Now, TCEBAI introduces stricter eligibility criteria whereby the benefit would be available for companies which integrate meaningful AI functionality and not for superficial changes. Activities such as software upgrades, general IT support, and system maintenance will not be eligible for credit.
- Qualified companies would be eligible for 22% of refundable and 8% of nonrefundable credit in 2026, which would change to 21% and 20% refundable credit and 9% and 10% non-refundable credit in the year 2027 and 2028, respectively.
- Specialized AI consulting services will be eligible activities when applying for employee certificates.
- Preparatory work done up to 12 months before starting an AI-integrated project can now qualify as work primarily related to e-business.
- For companies doing intercompany outsourcing, all revenue from services provided to a related beneficiary outside Quebec — including support and maintenance — must be included when calculating the rate reduction.
- Non-refundable credits no longer have to be carried forward only to years when the refundable credit is claimed. This change applies to credit balances from tax years beginning before January 1, 2026. But the other amendments would apply to tax years starting after December 31, 2025.

For individuals

Changes to personal income tax thresholds –

There is no change in individual income tax rates. However, tax brackets and other amounts have been indexed by 2.05% to account for inflation. The tax brackets for 2026 are as follows:

Financial Year 2026	Financial Year 2025	2025 & 2026
Taxable Income Thresholds	Taxable Income Thresholds (CAD)	Tax Rate (%)
Up to 54,345	Up to 53,255	14%
54,346 to 108,680	53,256 to 106,495	19%
108,681 to 132,245	106,496 to 129,590	24%
132,246 and above	129,591 and above	25.75%

Automated income tax filing for low-income individuals: A new measure will allow Revenue Québec to automatically file income tax returns for certain low-income individuals who may not file on their own. To qualify, a person must live in Québec on December 31 of the tax year and must not have filed a return by the deadline. Additional criteria, focusing on simple and stable tax situations, will be set by spring 2027.

Other disclosure-related measures

The budget introduces changes to the mandatory and preventive disclosure mechanisms:
- Information returns will no longer need to be sent separately by registered mail. This change supports future electronic filing.
- The Minister will no longer be required to issue a receipt confirmation when information returns are submitted.
- 120-day compliance presumption is removed. The Minister’s lack of follow-up within 120 days will no longer mean the disclosure is automatically considered compliant.

These changes apply to transactions occurring on or after March 18, 2026.

Implication:

Businesses should evaluate their eligibility and the impact of AI-related tax credit. Employers should update their payroll processes to give effect to changes in personal tax brackets.

Canada: Highlights of the Ontario budget 2026

Ontario’s Finance Minister Peter Bethlenfalvy presented the province’s budget for 2026 on March 26, 2026.

The key highlights of the budget 2026 are as follows:

Corporate income tax rates – The budget proposes reducing Ontario’s small business tax rate for Canadian-Controlled Private Corporation (CCPCs) from 3.2% to 2.2%, effective from July 1, 2026. The general corporate income tax rate in Ontario remains unchanged at 11.5%.
The budget proposes certain capital cost allowance and immediate expensing for certain depreciable assets and machinery in line with federal measures.
The budget proposes eliminating the Regional Opportunities Investment Tax Credit (ROITC) effective January 1, 2027. Expenses incurred before that date will still qualify for the credit.
The budget does not change Ontario’s personal income tax rates. However, the budget proposes to reduce Ontario’s non-eligible dividend tax credit to 1.99% (from 2.99%), effective January 1, 2027, thereby increasing the non-eligible dividend tax rate.

Implication:

Businesses should evaluate the impact of the proposals.

China

China: State Taxation Administration issues revised guidance for VAT registration effective from January 1, 2026

The State Taxation Administration’s Announcement No. 2 of 2026, effective from January 1, 2026, introduced rules for general VAT taxpayer registration with retroactive impact. The key provisions are as under:

Businesses with annual taxable sales above RMB 5 million are required to register as general VAT taxpayers unless exempt. Certain sectors such as state-owned grain enterprises, gas stations, and air transport companies must register regardless of turnover.
Individuals and non-enterprise units not regularly engaged in taxable activities may continue as small-scale taxpayers. The taxpayer with turnover below the threshold may opt for voluntary registration if proper records are maintained. Annual taxable sales are calculated over any continuous 12-month or four-quarter period, excluding one-off transactions like real estate or intangible asset transfers. If the threshold is exceeded, registration would need to be done within 10 days and will have retroactive effect from the first day of the period in which the turnover exceeded the threshold. Thus, the taxpayers would be required to amend past VAT returns, and they can claim input VAT credits.
A failure to register on time would result in automatic reclassification within five working days, increased VAT liabilities and compliance requirements.
Taxpayers who exceeded the threshold in Q4 or December 2025 will be treated as general VAT taxpayers from January 1, 2026. From 2026 onwards, the general VAT taxpayer guidance period will not apply, and any excess prepaid VAT arising from additional special VAT invoices can be either offset against future liabilities or claimed as a refund.

Implication:

Businesses should review their annual taxable sales against the RMB 5 million threshold and act accordingly.

China: Ministry of Human Resources and Social Security issues work injury guidelines clarifying concepts like work hours, workplace, etc.

On November 13, 2025, China’s Ministry of Human Resources and Social Security issued Opinions (III), providing important clarifications on China’s work injury system.

Under Chinese law, an injury is usually considered a work injury if it happens during working hours, at a workplace, and for work-related reasons. Recognised injuries may entitle employees to social insurance benefits and sometimes trigger additional employer liabilities.

Key takeaways for Opinions (III)

Working time – It clarifies that it is not limited to official working hours and will encompass overtime and temporary tasks assigned by the employer. It will also apply to employees working irregular hours, traveling, or outside the office.

Workplaces – This would not be limited to the employer’s physical premises; it may include areas outside the premises where the work tasks are completed, as well as reasonable commuting areas between different work locations.

Work-related injury – Opinions (III) confirms that the injury must have a direct link to work duties. Protection may extend beyond normal work activities to include:

Actions taken to protect the employer’s legitimate interests, like preventing property damage or resolving workplace conflicts.
Injuries occurring during basic needs (e.g., restroom breaks, drinking water).

However, injuries caused purely by personal reasons remain excluded.

Commuting injuries: Opinions (III) provides guidance on commuting-related injuries. It clarifies that it will include the following-

commuting to and from the workplace, habitual residence, or employer-provided dormitory.
commuting to the residence of a spouse, parents, or children.
activities meeting ordinary work-and-life needs, such as grocery shopping or picking up children, as long as they occur during commuting within a reasonable time and route.

It clarifies that travel during holidays or for pure personal reasons is not covered.

Remote and home-based work – The Opinion clarifies that injuries at home can count if they happen during working hours and for work purposes. Structured work from home, such as using work equipment, would be covered, but brief messages or calls will not be covered. Sudden illnesses that can be associated with high-pressure work from home can be covered.

Implication:

Employers should review the working conditions in light of new guidance and update their policies on working hours, overtime, business travel, and remote/home-based work.

Croatia

Croatia: VAT reforms introduced, including mandatory e-invoicing and revised compliance requirements, effective January 1, 2026.

The Croatian Parliament has adopted amendments to the VAT Act aimed at enhancing digitalisation, simplifying compliance, and aligning with the upcoming “Fiscalization 2.0” framework.

The changes are as follows:

Mandatory e-invoicing (B2B):
E-invoicing will be mandatory for all domestic B2B transactions for businesses established or having a permanent establishment in Croatia. Customer consent for issuing e-invoices is no longer required.
Extended filing deadlines:
VAT returns (Obrazac PDV), recapitulative statements, and EU acquisition lists must now be filed by the last day of the following month (previously the 20th day).
Simplification of reporting:
The U-RA form (incoming invoices) and PPO declaration (reverse charge reporting for certain services) have been abolished.
VAT cash accounting scheme:
Businesses with annual supplies not exceeding EUR 2,000,000 in 2025 may opt for the cash accounting scheme in 2026, allowing VAT to be accounted for upon receipt of payment.
Reduced VAT rate extension:
The reduced 5% VAT rate on natural gas, district heating, and firewood has been extended until March 31, 2026.

While most provisions apply from January 1, 2026, VAT reporting for December 2025 will continue under the existing rules.

Implication:
Businesses will need to adjust invoicing systems to comply with mandatory e-invoicing requirements and update internal processes in line with revised filing deadlines and reporting simplifications.

Finland

Finland: Statutory health insurance contribution rates increased for employers and employees, effective January 1, 2026

Finland has introduced moderate increases to its statutory health insurance effective from January 1 to December 31, 2026. The updated rates are as follows:

Employer health insurance contribution: 1.91% of wages (increased from 1.87% in 2025)
Employee health care contribution: 1.10% of income taxable in municipal taxation (increased from 1.06%)
Employee daily allowance contribution: 0.88% of wages or entrepreneurial income (increased from 0.84%), applicable where annual income is at least EUR 17,255 (previously EUR 16,862)

Implication:

Employers should ensure that payroll systems are updated to reflect the revised rates and thresholds for 2026.

France

France: Parliament approved Finance Bill for 2026

The French Parliament approved the 2026 Finance Bill on February 2, 2026. It was promulgated on February 19, 2026, and published in the Official Gazette on February 20, 2026.

The following are the key provisions and amendments introduced by the Finance Act 2026 which will apply for 2026 unless specified otherwise:

Amendment relevant for companies:
- Extension of the Exceptional Surtax for large companies

The Finance Act extends the exceptional surtax on large companies for one more year. The turnover threshold for its applicability has increased from EUR 1 billion to EUR 1.5 billion.

Tax rates remain the same:

– 20.60% for companies with turnover between EUR 1.5 billion and EUR 3 billion

– 41.20% for companies with turnover above EUR 3 billion

The tax will be calculated on the average corporate income tax paid for fiscal years 2025 and 2026. Companies are required to make 98% advance payment along with their final corporate tax installment (e.g., December 15, 2026, for calendar-year taxpayers).

Business Contribution on Added Value (“CVAE”):

The Business Contribution on the Added Value (“CVAE” or “Cotisation sur la Valeur Ajoutée des Entreprises”), which was originally planned to be abolished by 2024 and then extended to 2027, will now be eliminated by 2030. The top CVAE tax rate of 0.28% for 2024 will remain unchanged until 2027. The previously scheduled reduction to a top rate of 0.19% in 2025 has been postponed to 2028, and further reduction to 0.09%, originally planned for 2026, will also take effect in 2028. The complete abolition of CVAE is now set for 2030.

Personal Income Tax (“PIT”):

To adjust the impact of inflation on the tax burden, the 2026 Finance Act provides a 0.9% upward adjustment to the income tax brackets for income tax scale as under:

Tax Rate	Tax Slabs (2026)	Tax Slabs (2025)
0%	Up to EUR 11,600	Up to EUR 11,497
11%	EUR 11,601 to EUR 29,579	EUR 11,498 to EUR 29,315
30%	EUR 29,580 up to EUR 84,577	EUR 29,316 up to EUR 83,823
41%	EUR 84,578 up to EUR 181,917	EUR 83,824 up to EUR 180,294
45%	Above EUR 181,917	Above EUR 180,294

Initial Finance Bill had proposed removing the 10% tax allowance applied to retirement pensions and replacing it with a flat EUR 2,000 deduction. However, the adopted 2026 Finance Act drops this proposal. The 10% allowance is fully maintained, ensuring retirees keep the existing tax benefit.
The differential contribution on high incomes has been extended by the 2026 Finance Law. This tax is designed to ensure that the wealthiest households pay at least a minimum tax rate of 20% on their income. It will remain in place until the public deficit falls below 3% of GDP. The contribution applies to households whose reference tax income for 2025 exceeds:
- EUR 250,000 for a single person
- EUR 500,000 for a couple
Finance Act introduces a new “small parcel tax” of EUR 2 per item to address competition from e-commerce platforms. The tax applies from March 1, 2026, to parcels that:
- have a value under EUR 150, and
- are shipped from non-EU countries.

Implication:

The French Finance Act of 2026 contains a number of significant changes that will have a broad impact on both multinational corporations and domestic businesses. Companies need to closely evaluate these changes and adjust their strategies accordingly.

France: VAT provisions to be codified under new tax code effective from September 2026

The Ordinance No. 2025-1247, issued on December 20, 2025, reorganises VAT rules into a separate Goods and Services Tax Code (CIBS), effective from September 1, 2026. From this date, VAT provisions will be moved from the French Tax Code into a new Goods and Services Tax Code. As part of this change, the rules will be extensively redrafted and renumbered to improve clarity, consistency, and overall usability.

The recodification will also standardise terminology, incorporate key principles from CJEU case law, and introduce certain new concepts, such as an explicit zero VAT rate. In addition, the rules will be reorganised by business sector, and various special VAT regimes will be consolidated into a more structured framework. The reform will further integrate EU-mandated technical measures, including elements of the VAT in the Digital Age (“ViDA”) package, which will be implemented in phases.

Separately, the e-invoicing reform will continue as planned. From September 1, 2026, all businesses established in France will be required to be able to receive electronic invoices. To ensure a smooth transition, existing references to current VAT rules will remain valid and will be treated as referring to the new code until December 31, 2027.

Implication:

Companies should begin reviewing and updating their documentation and processes to align with the new code, which will come into effect in September 2026.

France: Key amendments to the e-invoicing and E-reporting rules

France has adopted its 2026 Budget Law, confirming updates to the upcoming B2B e-invoicing and e-reporting rules. The law, approved on February 2, 2026, clarifies key aspects of the system and supports preparation for its phased implementation.

The Public Invoicing Portal (“PPF”) will act as a central directory for invoice routing. The term Plateforme de Dématérialisation Partenaire (PDP) will be replaced with Plateforme Agréée (PA) across the legislation.
E-reporting will apply to B2C and cross-border transactions, with payment reporting required only in specific cases. Certain obligations for non-established businesses are postponed to September 2027, while French-established companies remain on track for September 2026.
The penalty regime for non-compliance has been strengthened. E-invoicing penalties will increase from EUR 15 to EUR 50 per invoice, capped at EUR 15,000 per year, while e-reporting failures will attract fines of EUR 500 per transmission, also capped annually at EUR 15,000.

Implication:

Businesses should evaluate the impact of the above changes on the e-invoicing system.

Germany

Germany: Revised social security thresholds and tax changes introduced, effective January 1, 2026.

Germany has implemented annual updates to its social security contribution limits and tax thresholds.

The key changes are as follows:

Contribution assessment limits (Beitragsbemessungsgrenze):
The maximum salary subject to social security contributions has increased:
- Statutory health insurance: EUR 5,812.50 per month (previously EUR 5,512.50)
- Statutory pension insurance: EUR 8,450 per month (previously EUR 8,050)
Employees earning above these thresholds will continue to pay contributions only up to the capped amount.
Private health insurance threshold:
The annual income threshold for opting out of statutory health insurance has increased from EUR 73,800 to EUR 77,400.
Additional health insurance contributions:
The standard contribution rate remains 14.6% (split equally between employer and employee). However, additional contributions charged by insurers are expected to increase from around 2% to over 3% on average, depending on the provider.
Tax changes:
- Basic tax-free allowance increased from EUR 12,096 to EUR 12,348 per year
- Commuter allowance increased from EUR 0.30 (and 0.38 beyond 20 kilometer) to EUR 0.38 per kilometer from the first kilometer.
Family-related benefits:
- Tax-free child allowance (Kinderfreibetrag) increased from EUR 9,312 to EUR 9,756 per child.
- Child benefit (Kindergeld) increased from EUR 255 to EUR 259 per month per child from January 2026 (no action required as payments will be adjusted automatically)
Childcare entitlement:
From August 2026, children in their first year of primary school will have a legal right to full-day childcare.

Implication:
The revised thresholds may increase employer payroll costs and employee contributions. Employers should update payroll systems accordingly.

Germany: Crypto-Asset Tax Transparency Act (“KStTG”) enacted introducing reporting and compliance obligations for crypto-asset service providers, effective January 1, 2026.

Germany has implemented EU DAC8 into domestic law through the KStTG, aligning with the OECD Crypto-Asset Reporting Framework (CARF). The rules apply broadly to crypto-asset service providers operating in or serving customers in Germany/EU, regardless of their place of establishment.

Timeline:
- Effective from: January 1, 2026
- First reporting period: Calendar year 2026
- First reporting deadline: July 31, 2027
Scope (who is covered):
Crypto exchanges, trading platforms, wallet providers, brokers, custodians, and other intermediaries providing services to EU customers.
Key obligations:
- Annual reporting of user and transaction data to the Federal Central Tax Office (BZSt) in a prescribed electronic format
- Identification and verification of users’ identity and tax residence (new users before onboarding; existing users by January 1, 2027)
- Mandatory registration with the BZSt before commencing reportable activities
- Obligation to obtain required user information; non-compliant users may be restricted from transacting
Reporting must be carried out electronically through a dedicated interface, requiring system readiness and high-quality data.
Sanctions:
Non-compliance (late, incomplete, or incorrect reporting) may result in penalties of up to EUR 50,000 per case.

Implication:
Businesses dealing in crypto assets should implement robust data collection and reporting systems to ensure timely compliance and avoid penalties.

Honduras

Honduras: Honduras announces revised 2026 income tax table for individuals.

The Honduras Revenue Administration Service (“SAR”) issued Notice 02-2026 dated January 7, 2026, updating the progressive income tax table for the tax year 2026. The revised rates will be used to calculate and collect individual income tax (“ISR”) in Honduras.

The following progressive tax rates apply to individual income for the 2026 fiscal year:

Annual Net Taxable Income (HLN)	Monthly Salary (HLN)	Tax Rate
0.01 to 228,324.32	0.01 to 22,360.36	0%
228,324.33 to 348,154.10	22,360.37 to 32,346.18	15%
348,154.11 to 809,660.75	32,346.19 to 70,805.06	20%
809,660.76 and above	70,805.07 and above	25%

Additionally, the annual medical deduction of HNL 40,000 will continue to apply for the tax year 2026.

Implication: Employers should update their payroll systems to reflect the revised 2026 ISR tax brackets, ensuring accurate withholding of income tax from employee salaries

Hong Kong

Hong Kong: ‘Continuous contract’ criteria revised to expand eligibility for statutory employment benefits, effective January 18, 2026.

Hong Kong has amended the ‘continuous contract’ requirement under the Employment Ordinance through the Employment (Amendment) Ordinance 2025. The changes introduce greater flexibility in determining eligibility for statutory employment benefits.

Under the revised rules, an employee will be considered under a continuous contract if employed by the same employer for four weeks or more and meets either of the following conditions:

Works at least 17 hours per week (previously 18 hours); or
Works at least 68 hours over a four-week period, where weekly hours fall below 17 in any given week.

The amendments apply prospectively from January 18, 2026, and do not affect periods prior to this date.

Implication:
Employers should review employment contracts, work schedules, payroll records, etc., to ensure that employees meeting the new thresholds are correctly identified and provided with applicable benefits

India

India: Revised DIN KYC rules introduced, effective March 31, 2026.

The Ministry of Corporate Affairs (“MCA”) has notified the Companies (Appointment and Qualification of Directors) Amendment Rules, 2025, to streamline the Director Identification Number (“DIN”) KYC framework and reduce compliance burden.

The key changes are as follows:

DIN holders will now be required to file KYC once every three years, replacing the earlier annual filing requirement (Form DIR-3 KYC).
Directors who are compliant with KYC requirements will follow the new regime, with their next filing due by June 30, 2028. Directors with pending KYC filings may regularize their DINs under the existing provisions until March 31, 2026.
Directors must promptly update any changes in key details (such as mobile number, email, address, or identification documents), even within the three-year cycle.
Non-compliance or delayed updates may continue to attract penalties and DIN deactivation risks.

Implication:

The revised rules reduce the compliance burden by eliminating annual filings; however, companies must ensure timely updates of director details to avoid penalties and maintain DIN validity.

India: New foreign exchange regulations for export and import of goods and services notified, effective October 1, 2026.

On January 13, 2026, the Reserve Bank of India (RBI) notified the new Regulations and corresponding Directions to Authorized Dealers (“ADs”), which will supersede the existing 2015 regulations, master directions, and related circulars. The revised framework is principle-based, aimed at improving ease of doing business and empowering AD Banks for faster decision-making.

The key changes are as follows:

Export Declaration Form (“EDF”) – Mandatory for all exporters
- Mandatory filing for all exporters, including service exporters.
- For goods exported via EDI ports, EDF is deemed filed through the shipping bill
- Submission timelines:
  - Goods: At the time of export
  - Services: Within 30 days from the end of the month of invoicing
- For services:
  - A single EDF may be filed for multiple recipients in a month.
  - Must include overseas party details, invoice details, and SAC (Service Accounting Code) code
  - For services (other than software), EDF may be filed on or before receipt of payment.
- EDF is also required for exports made without consideration.
Time period for realisation of export proceeds
- 18 months when invoiced/settled in INR
- 15 months in all other cases
- Timeline begins from:
  - Goods: Date of shipment
  - Goods exported to warehouse: Date of sale
  - Services: Date of invoice
  - Project exports: As per contract terms
Time period for import payments
- Payments must be made within the timeline specified in the underlying contract.
Advance payments and delayed payments
- Advance remittance prohibited for the import of gold and silver.
- Export and import advances and subsequent payments must be routed through the same AD Bank (change permitted with intimation)
- AD Banks may define thresholds requiring standby Letter of Credit (LC) or guarantees.
- Interest on advance/delayed payments must comply with trade credit all-in cost ceilings
- Where:
  - If an import is not completed and the advance payment is not repatriated, future advance payments will require a Letter of Credit (LC) or bank guarantee.
  - If export proceeds remain unrealized for more than one-year, future exports will be permitted only against advance payment or an irrevocable LC.
Merchanting Trade Transactions (“MTT”)
- Permitted as per Foreign Trade Policy
- Time gap between outward and inward remittance must not exceed 6 months (extendable by AD)
- Payments must be routed directly between overseas buyer and seller (exceptions allowed)
- Proper documentation required to establish genuineness.
Enhanced powers of AD Banks
AD Banks are authorised to:
- Permit reduction (including non-realisation) of export value based on justification.
  - Up to INR 10 lakh, allowed based on exporter declaration.
- Allow set-off of export receivables against import payables, including with group entities.
- Permit third-party receipts and payments, subject to bona fide verification.

Implication:

Businesses should ensure complete documentation, timely reporting, and compliance with prescribed timelines, and coordinate with their AD Banks to avoid delays or compliance issues.

India: Revised PAN rules introduced including new application forms, stricter documentation requirements, and revised PAN quoting thresholds, effective April 1, 2026

With the implementation of the Income-tax Act, 2025, the Permanent Account Number (PAN) framework has been updated to strengthen transaction reporting, verification, and compliance.

The key changes are as follows:

Revised PAN application framework
- PAN applications based solely on Aadhaar are no longer permitted
- Applicants must now use category-specific forms, including:
  - Form 93 for Individuals
  - Form 94 for Companies
  - Form 95 for Foreign individuals
  - Form 96 for Foreign entities

Revised PAN quoting thresholds

PAN will now be mandatory for the following transactions at revised thresholds:

Nature of Transaction	Existing Threshold (till March 31, 2026)	Revised Threshold (from April 1, 2026)
Cash withdrawals (bank/post office)	More than INR 2,000,000 (financial year)	More than INR 1,000,000 (financial year)
Cash deposits (bank/post office)	More than INR 50,000 (single day)	More than INR 1,000,000 (financial year)
Motor vehicle transactions	All (except two-wheelers)	More than INR 500,000 (includes motorcycles, excludes tractors)
Immovable property transactions	More than INR 1,000,000	More than INR 2,000,000
Cash payments at hotels/restaurants	More than INR 50,000 (per transaction)	More than INR 100,000

Enhanced documentation requirements
- PAN applicants must submit additional supporting documents, including identity, address, and entity-specific documentation
- Stricter verification requirements apply, particularly for non-residents and foreign entities

Implication:
Businesses should update their KYC, onboarding, and transaction monitoring processes to ensure PAN is obtained and reported correctly in line with the revised thresholds

Companies Compliance Facilitation Scheme, 2026 introduced, effective April 15, 2026, to July 15, 2026

The Ministry of Corporate Affairs (“MCA”) has introduced the Companies Compliance Facilitation Scheme, 2026 (“CCFS-2026”) as a one-time regulatory measure to enable defaulting companies to regularize pending compliances at concessional rates. The scheme is aimed at improving overall corporate compliance and governance standards.

Under the scheme, companies, including inactive companies, are provided the following options:

Complete pending annual filings by paying only 10% of the additional fees applicable on delays;
Apply for dormant status under Section 455 by filing e-form MSC-1 with payment of 50% of the normal prescribed fee, allowing inactive companies to remain registered with minimal compliance requirements; or
Apply for strike-off by filing e-form STK-2 during the scheme period on payment of 25% of the applicable filing fees.

The scheme will be in force from April 15, 2026, to July 15, 2026. It is available for filing of e-forms that were due on any date prior to the scheme period. However, the scheme is not applicable to certain categories of companies, including those where final notice for strike-off has already been initiated, companies that have already applied for strike-off or dormant status, companies dissolved under amalgamation schemes, and vanishing companies.

Implication:
Companies should review their compliance status and take appropriate action within the scheme period to avoid penalties and regulatory consequences.

Ireland

Ireland: Enhancement of the R&D tax credit regime under finance act 2025

Ireland has enacted Finance Act 2025, which introduces enhancements to the Research & Development (“R&D”) tax credit regime, making it more attractive for businesses investing in innovation.

Key changes are as follows:

The tax credit has been increased from 30% to 35% of qualifying R&D expenditure.
The threshold for receiving the credit in the first year has increased from EUR 75,000 to EUR 87,500, allowing faster access to cash.
Where an employee spends more than 95% of their time on R&D, 100% of their salary can be treated as qualifying R&D expenditure.
Applies generally to accounting periods starting on or after 2026.

Implication:

Companies should review their R&D activities to maximise benefits under the revised regime.

Ireland: DAC8 implemented to Introduce reporting obligations for Crypto-Asset service providers, effective January 1, 2026

Ireland is implementing EU Directive DAC8 (Directive (EU) 2023/2226), which expands the scope of the existing administrative cooperation framework to cover crypto-assets and electronic money.

The key changes are as follows:

New reporting obligations for crypto-asset service providers:
Entities such as crypto exchanges, brokers, and wallet providers will be required to report user and transaction data to Irish tax authorities.
Scope of reportable transactions:
- Exchange of crypto-assets for fiat currency
- Exchange between crypto-assets
- Transfers of crypto-assets
Due diligence requirements:
Service providers must perform KYC and tax residency verification for users and maintain ongoing records.
Automatic exchange of information:
- Reported data will be shared between EU Member States, enhancing cross-border tax transparency.
Timeline:
- Effective date: January 1, 2026
- First reporting period: Calendar year 2026
- First reporting likely due in 2027 (based on EU timelines)

Implication:
Businesses dealing in crypto assets should implement robust data collection and reporting systems to ensure timely compliance and avoid penalties.

Israel

Israel: Israel expands e-invoicing with lower thresholds for invoice allocation number requirement.

The Israel Tax Authority (“ITA”) has issued new regulations on December 7, 2026, to expand the scope of its mandatory e-invoicing system, effective from 2026. It lowers the transaction thresholds for requiring an “allocation number,” thereby broadening VAT compliance requirements. Under the “Invoice Israel” reform, businesses must obtain an ITA-issued allocation number for certain B2B invoices. Customers can claim input VAT only if this number is stated on the invoice.

The threshold for requiring an allocation number has been reduced from NIS 20,000 to NIS 10,000 effective January 1, 2026, and will be further lowered to NIS 5,000 from June 1, 2026. Thus, the supplier will need to request the allocation number through the e-invoicing platform for issuance of an invoice based on the new threshold. The Israel Tax Authority reviewed the invoice to confirm that it is not irregular before issuing such a number.

Implication:

Businesses should review and update their systems to ensure compliance with the revised thresholds to avoid any disruption in input VAT claims.

Japan

Japan: 2026 Tax Reform Proposals

Japan’s coalition government released the 2026 tax reform outline on December 19, 2025. The proposals—which are expected to be enacted in 2026—aim to revitalise the economy, support households and align Japan with global tax norms

Corporate tax reforms

Incentives for investment in specified production facilities.
Corporations that obtain approval under the Industrial Competitiveness Enhancement Act can choose either 100% immediate depreciation or a tax credit (4% for buildings; 7% for machinery and software). Eligible companies must invest at least JPY 3.5 billion (large corporations) or JPY 500 million (SMEs), achieve a minimum 15% return on investment, and secure approval by March 31, 2029. The credit can offset up to 20% of corporate tax, with unused credits carried forward for three years.
R&D tax incentives.
New credits of 40%–50% apply to R&D in strategic technologies (AI, advanced semiconductors, quantum computing, etc.), with a credit limit of 10% of corporate tax liability and three-year carry-forward. Companies must obtain approval for their R&D plans by March 31, 2029. Existing R&D credits are tightened: taxpayers reducing R&D spend by 10% or more become ineligible, and only 50% of overseas outsourcing costs will be creditable from financial years starting on or after March 31, 2028 (70% from fiscal year 2026 and 60% from fiscal year 2027).
Documentation retention for intra-group transactions.
Companies must keep detailed documents—contracts, invoices, cost-allocation calculations—for payments to related parties. Non-compliance may result in loss of “blue tax return” status, which provides benefits like loss carry-forwards and tax credits. The definition of “related party” mirrors transfer-pricing rules and covers parent-subsidiary relationships and entities under common control. The rule may apply from financial years beginning on or after April 1, 2026.

Consumption tax (JCT) changes

Cross-border e-commerce (low-value goods).
Currently, imported goods valued under JPY 10 000 are exempt from JCT. Under the reform, sales of low-value goods (LVG) by overseas e-commerce sellers to Japanese consumers will become subject to 10% JCT regardless of where title transfers. To retain the import JCT exemption, sellers must register as specified LVG sellers and provide registration details to customs brokers. The special adjustment (multiplying the purchase price by 0.6) for calculating the CIF value will be abolished, reducing the number of shipments qualifying for LVG status. The proposal would apply from April 1, 2028.
JCT obligation for overseas platform operators.
When overseas sellers use Japanese warehouses, JCT liabilities often go unreported. To address this, certain e-commerce platforms will be assigned as “specified EC platforms” and become liable for JCT on behalf of non-resident sellers once transactions exceed JPY 5 billion per year. The change is expected to apply from April 1, 2028.
Qualified invoice system adjustments.
Transitional input-credit relief for purchases from non-qualified invoice issuers will be extended and phased down: 70% deductible (from October 2026), 50% (from October 2028) and 30% (from October 2030). Purchases exceeding JPY 100 million per supplier in a taxable period will not qualify for this relief. Small businesses that become qualified invoice issuers can deduct 70% of JCT on taxable sales during FY 2027–28.

International taxation

Implementation of OECD Pillar Two.
Japan will adopt a 15% global minimum tax on large multinationals. The reforms introduce a Qualified Domestic Minimum Top-Up Tax (QDMTT) to ensure a 15% effective tax rate in Japan (protecting Japanese income from foreign top-up taxes), an Income Inclusion Rule (IIR) requiring Japanese parents to pay top-up tax on low-taxed foreign subsidiary income, and an Undertaxed Profits Rule (UTPR) for jurisdictions failing to implement Pillar Two. The rules apply to groups with revenue of at least EUR750 million and will take effect for fiscal years beginning on or after April 1, 2026, except the IIR (from April 1, 2024).
Controlled foreign company (CFC) rules.
The reform clarifies the treatment of foreign subsidiaries in liquidation.

Individual income tax reforms

Crypto-asset taxation.
Gains from the transfer of specified crypto assets via registered exchanges will be taxed separately at a flat 20% rate (15% national tax and 5% local tax). Losses from such transactions can be carried forward for three years and applied only against future crypto-asset gains.
Basic deduction and employment income thresholds.
The basic personal deduction will increase by JPY 40 000 to JPY 620 000, and the minimum employment income deduction will rise to JPY 690 000.
Special national defence tax.
A new 1% surcharge on income tax will replace the existing reconstruction tax; the two changes are intended to offset each other, resulting in no net increase in tax.

Implication:

Businesses should assess the impact of the proposed reforms on their tax position, investment planning, and compliance requirements, particularly in relation to R&D incentives, cross-border transactions, and documentation obligations

Japan: Labour law amendments revising maternity and family-related leave entitlements, effective December 7, 2025

A recent amendment to labour law has been introduced to align domestic standards with international practices, focusing on expanding family-related leave, strengthening worker protections, and simplifying employer compliance. The amended provisions came into effect on December 7, 2025.

The key changes are as follows:

Extended maternity leave:
Maternity leave has been increased from 98 days to up to 120 days (subject to any variation by royal decree).
Increased paid maternity entitlement:
Employers are now required to provide full wages for up to 60 days of maternity leave (previously 45 days).
Infant care leave:
Additional leave of up to 15 days may be granted where the newborn is ill or requires special care, subject to medical certification. Employees are entitled to 50% of their regular wages during this period.
Spouse childbirth support leave:
Employees are entitled to up to 15 days of paid leave to support their spouse following childbirth. This leave must be availed within 90 days of the child’s birth.

Implication:
Employers should review and update their leave policies, employment contracts, and payroll practices to ensure compliance with the enhanced leave entitlements.

Japan: Gender pay gap and diversity disclosure requirements expanded, effective April 1, 2026

Japan has further expanded its gender pay gap and workplace diversity disclosure framework, with the latest changes increasing coverage and reporting obligations for employers. These disclosures are required to be published on company websites or designated government portals, making them accessible to job seekers, investors, clients, and other stakeholders.

Effective April 1, 2026, the scope of reporting has been broadened in two key ways.

Companies with more than 300 employees are now required to disclose the ratio of women in management, in addition to existing reporting requirements.

Companies with 101 to 300 employees are brought within the reporting ambit for the first time and must disclose both the proportion of female managers and gender pay gap data.

These requirements build on existing disclosure obligations and must be complied with annually. As in prior years, companies are required to publish the relevant data within three months of the end of their fiscal year.

Implication:
Companies falling within scope must ensure systems are in place to collect, verify, and report gender pay gap and workforce composition data accurately and within prescribed timelines.

Mexico

Mexico: UMA values revised for 2026 with 3.69% increase; effective February 1, 2026

On January 9, 2026, the updated daily, monthly, and annual values of the Unit of Measurement and Update (UMA) were published in the Federal Official Gazette, reflecting an increase of 3.69% compared to 2025. The revised values will come into effect from February 1, 2026.

The UMA is determined annually by the National Institute of Statistics and Geography (INEGI), based on the year-on-year variation in the National Consumer Price Index as of December of the preceding year. The updated value is calculated by applying this inflation factor to the prior year’s daily UMA.

The values of the UMA for 2026 will be as follows:

Year	Daily (MXN)	Monthly (MXN)	Annual (MXN)
2026	117.31	3,566.22	42,794.64

As defined under applicable law, the UMA serves as an important economic reference unit used to determine the value of payments, obligations, and thresholds established under federal and state regulations. It is widely applied across tax, labour, and social security frameworks, including for the calculation of penalties and statutory limits.

Implication:
The increase in UMA values will impact the calculation of tax thresholds, penalties, social security contributions, and statutory limits. Companies should review relevant calculations and ensure systems are updated to reflect the revised values.

Mexico: Mandatory workplace training on prevention of violence against women Introduced, effective January 16, 2026.

On January 15, 2026, a decree was published in the Official Gazette introducing reforms aimed at eliminating violence against women, preventing gender discrimination, and promoting equality in the workplace. The reforms came into force on January 16, 2026.

Under the revised framework, employers are required to provide regular training to all employees on the prevention and eradication of workplace violence. The training must cover identification and prevention of such conduct, reporting procedures, and guidance on maintaining a respectful work environment. Employers are also required to maintain proper documentation of employee participation, training content, and the frequency of sessions conducted.

The Ministry of Labor and Social Welfare (STPS) is empowered to enforce compliance and may impose penalties for noncompliance ranging from approximately MXN 29,000 to MXN 586,000 (USD 1,626 to USD 32,850).

Implication:
Employers must implement formal training programs and documentation processes to ensure compliance with the new requirements. Failure to comply may result in financial penalties and regulatory action.

Netherlands

Netherlands: Amendment to Netherlands Germany tax treaty regarding cross-border remote work effective from January 1, 2026.

An amendment to the Netherlands–Germany tax treaty has come into effect from January 1, 2026, providing relief for cross-border remote workers.

On April 14, 2025, the Netherlands and Germany agreed to amend their tax treaty to ease tax obligations for cross-border workers who work remotely. As per the amendment, employees who live in one country and work for an employer based in the other may now work from home for up to 34 days per year without triggering additional tax liability in their country of residence.

Key features of the amendments:

Cross-border workers can work from home for up to 34 days annually and still be taxed only in the country where their employer is located. This arrangement is not available to individuals who regularly work 1–2 days per week from home, as they would exceed the 34-day limit. Working from a third country will also be counted towards the 34-day limit.
A day counts as a remote workday if more than 30 minutes of work is performed from home.

Implication:

Employers with cross-border staff subject to the Netherlands and Germany treaty should check the implications for their employees and update their policies.

Netherlands: Senate approves DAC8 crypto-asset reporting rules.

The Dutch upper house of the Parliament (the Senate) has approved legislation implementing the EU DAC8 directive on March 31, 2026. It will introduce new reporting and tax information exchange requirements for crypto-assets and electronic money, with retroactive effect from January 1, 2026.

The key provisions are as under:

Under the new rules, crypto-asset service providers and intermediaries must collect and report client information to the tax authorities by January 31 of the following year. The first reporting is due by January 31, 2027 for 2026 data. The information will be automatically exchanged with other EU Member States.
Entities holding a MiCA license or operating as crypto-asset service providers facilitating exchange transactions will fall within scope. These entities must perform due diligence and report client transaction data. Providers offering custodial services (e.g., wallets or accounts) will also be required to report account balance information under updated CRS/DAC2 rules.

The rules also expand disclosure requirements to include certain high-value cross-border rulings and Dutch residency cases. Non-compliance may result in penalties of up to EUR 1,030,000.

Implication:

Businesses dealing in crypto assets should implement robust data collection and reporting systems to ensure timely compliance and avoid significant penalties.

Poland

Poland: Amendments to the Labour Code and the Company Social Benefits Fund (ZFŚS), effective January 27, 2026.

On January 27, 2026, the Act of 4 December 2025 amending the Labour Code, and the Act on the Company Social Benefits Fund came into force, introducing changes to labour law procedures, leave encashment timelines, and employee consultation requirements.

Key changes include:

Employers and employees may now carry out various labour law-related procedures in electronic form, while retaining the option of paper-based processes.
Employers may now provide the following electronically:
- Information on workplace monitoring
- Information on the transfer of employment to another employer
- Consultation with trade unions on termination of employment
- Work schedules
- Occupational health and safety instructions
- Information to the State Labour Inspectorate on night workers
Employees may submit requests electronically, including:
- Flexible or individual work schedules
- Unpaid leave requests
The cash equivalent for unused annual leave must now be paid on the regular salary payment date (at least once a month), instead of upon termination of employment.
Where no trade union is present, employers must now consult at least two employee representatives (instead of one) on remuneration rules and Company Social Benefits Fund (ZFŚS) regulations.

Implication:
Employers should update their HR processes and documentation systems to accommodate electronic procedures, revise payroll practices for leave encashment, and ensure compliance with the revised employee consultation requirements.

Poland: Revision of sick leave rules under the Social Insurance System, effective January 27, 2026 (with further changes by January 1, 2027)

On January 7, 2026, amendments to the Social Insurance System Act were signed into law to clarify how sick leave can be used and monitored. The changes are being implemented in phases from January 27, 2026, April 13, 2026, and January 1, 2027.

The changes are as follows:

Any paid work (regardless of contract type) or activity that delays recovery may lead to loss of sick pay. However, minor or incidental activities (e.g., basic daily tasks or limited work actions like signing a document) are allowed.
Authorities and eligible employers can now more easily inspect employees on sick leave, including verifying their identity.
Sick leave certificates can now be issued by doctors, nurses, and physiotherapists.
Future change (from January 1, 2027):

Employees may receive partial sick leave, allowing them to work in one role or perform certain tasks while being unfit for others.

Implication:
Employers should ensure employees do not perform paid work during sick leave, and review internal policies on sick leave monitoring.

Poland: Mandatory rollout of National e-Invoice System (KSeF) begins February 1, 2026

Poland has introduced mandatory e-invoicing through its National e-Invoice System (KSeF), with the requirement taking effect from February 1, 2026. The system enables the issuance, receipt, and storage of structured invoices in XML format. An invoice is treated as officially issued only after it is submitted to the system and assigned a unique identification number.

The rollout is being implemented in stages:

From February 1, 2026: Applies to taxpayers with gross sales exceeding PLN 200 million in 2024
From April 1, 2026: Extended to all other VAT-registered businesses with a presence in Poland
From January 1, 2027: Covers the smallest entities with monthly gross sales not exceeding PLN 10,000

The use of KSeF remains voluntary for B2C transactions.

Implication:

Businesses must ensure their systems and processes are integrated with KSeF to enable real-time invoice reporting and compliance.

Poland: Revision of length of service rules to include additional forms of work, effective January 1, 2026 (public sector) and May 1, 2026 (other employers)

On October 15, 2025, the President of Poland signed an Act amending the Labour Code and certain other laws, prepared by the Ministry of Family, Labour and Social Policy. The amendment expands the types of employment periods that will be included in the calculation of length of service, particularly by recognizing forms of work outside traditional employment contracts.

The key changes are as follows:

The following periods will now be included in length of service (subject to proper documentation):
- Self-employment and business activity, including cooperation with such persons (e.g., assisting family members)
- Work performed under civil law contracts (e.g., mandate or service contracts)
- Agency contracts
- Work performed abroad for a foreign employer (outside an employment relationship)
- Periods of suspension of business activity for childcare purposes
As a result, employees may have higher recognised seniority, which can lead to increased entitlements such as higher annual leave, longer notice periods, and higher severance pay, as well as eligibility for certain benefits linked to years of service.
Past periods may also be included; however, employees must provide supporting documentation. Employees will have 24 months from the effective date to submit evidence, failing which such periods will not be recognized.
Prior periods may be documented through:
- Certificates issued by the Social Insurance Institution (ZUS); or
- Other evidence, such as contracts, where formal records are not available.
Effective date:
- Public sector entities: January 1, 2026
- Private sector employers: May 1, 2026

Implication:

Employers may need to recognise additional service periods under the revised rules. This could result in higher employee seniority and increased entitlements such as leave, notice periods, and severance pay.

Poland: Implementation of DAC8 introducing mandatory reporting and information exchange for crypto-asset transactions, effective from March 18, 2026

On March 9, 2026, the President of Poland signed an Act implementing Council Directive (EU) 2023/2226 (“DAC8”). The Act was subsequently published in the Official Journal and entered into force on March 18, 2026.

The key changes are as follows:

Entities such as exchanges, brokers, and wallet providers will be required to report user and transaction data to the tax authorities.
The reporting will cover:
- Crypto-asset transactions (including exchanges and transfers)
- User identification and ownership information
Service providers must conduct customer identification and verification (KYC) and maintain accurate records.
Reported data will be shared between EU Member States, enhancing cross-border tax transparency.
Timeline:
- Applies from 2026
- First reporting expected in 2027
The framework introduces penalties and enforcement measures for failure to comply with reporting obligations.

Implication:
Businesses dealing in crypto assets should implement robust data collection and reporting systems to ensure timely compliance and avoid penalties.

Singapore

Singapore: Expansion of mandatory e-invoicing with phased compliance rollout for GST-registered businesses

The Inland Revenue Authority of Singapore (“IRAS”) has announced an expanded rollout of its e-invoicing regime, originally introduced on October 1, 2023. The framework requires businesses to transmit invoice data to IRAS via the InvoiceNow network (Peppol framework) using accredited access points.

The obligation, initially applicable to certain voluntary GST registrants, has now been extended to cover all GST-registered businesses, with phased implementation based on registration type and annual turnover.

The compliance deadlines are as follows:

Implementation Date	Entities Required to Comply
November 1, 2025	Companies voluntarily registering for GST within six months of incorporation
April 1, 2026	All new voluntary GST registrants
April 1, 2028	All new compulsory GST registrants; existing GST-registered businesses with annual sales less than or equal to SGD 200,000
April 1, 2029	Existing GST-registered businesses with annual sales less than or equal to SGD 1,000,000
April 1, 2030	Existing GST-registered businesses with annual sales less than or equal to SGD 4,000,000
April 1, 2031	Existing GST-registered businesses with annual sales more than SGD 4,000,000

Implication:
Businesses must assess their GST registration status and turnover to determine applicable deadlines and prepare for compliance.

Singapore: Statutory retirement and re-employment ages increase, effective July 1, 2026

At the Committee of Supply Debate on March 3, 2026, the Minister of Manpower announced that Singapore will raise the statutory retirement age from 63 to 64 and the re-employment age from 68 to 69, effective July 1, 2026. This adjustment keeps Singapore on track to further increase the retirement age to 65 and the re-employment age to 70 by 2030.

In parallel, several support measures for senior employment have been extended and enhanced:

The Senior Employment Credit has been extended until December 2027, with wage support of up to 7% for employees aged 69 and above.
The Part-Time Re-Employment Grant has also been extended until December 2027, to support employers in offering flexible work arrangements and structured career planning for senior workers

Separately, Central Provident Fund (CPF) contribution rates for senior workers will increase from 2027:

1.5%-point increase for employees aged 55 to 60
1%-point increase for employees aged 60 to 65

Implication:
Employers may need to retain employees for longer periods, and future increases in CPF contribution rates may lead to higher payroll costs.

South Korea

South Korea: Income tax reforms Bill increases corporate income tax rates for 2026; childcare exemption for personal income tax will be available for each eligible child.

South Korea enacted the Tax Reform Bill, 2026 on December 23, 2025, after approval by the National Assembly. The key changes include the following:

Increased its corporate income tax rates – Corporate tax rate will increase by one-percentage-point across all four corporate income tax brackets.

The table below summarizes the previous and revised corporate income tax rates:

Taxable Income (KRW)	Tax Rate 2026	Tax Rate 2025
Up to 200 million	10%	9%
200 million to 20 billion	20%	19%
20 billion to 300 billion	22%	21%
Above 300 billion	25%	24%

Local income tax at a rate of 10% will apply in addition to the above rates

Claiming treaty rates for withholding: Withholding agents or payers of income are now required to submit an application to the tax authorities in order to consider a reduced tax rate for withholding under a tax treaty. Such application is required to be filed within 2 months from the end of the tax year in which the income is paid.
Treaty exemption for non-taxation of Korea-sourced personal service income: In order to claim treaty exemption for personal service income, which is sourced in South Korea, the recipient is now required to submit necessary evidence and application to the payer of income, who in turn is required to file the same with the tax authorities by 9^th day of the month following the month in which the payment is made.

The Tax Reform Bill also made certain other changes like amendments to Global minimum tax provisions, change in securities transaction tax, etc.

Separately, effective from January 1, 2026, the tax exemption for childcare allowance provided to employees with children aged six years or younger has been expanded. The exemption, which was previously limited to KRW 200,000 per month in total, now applies up to KRW 200,000 per month per child.

Implication:
Businesses should evaluate the impact of an increase in tax rate on their profits. Further, they should update their processes regarding treaty benefit claims. Employers should take note of changes to childcare allowance and update their payroll systems.

South Korea:South Korea strengthens data breach penalties under PIPA.

On February 12, 2026, South Korea’s National Assembly approved changes to the Personal Information Protection Act (“PIPA”) that significantly increase penalties for serious data breaches. The changes were driven by a series of large-scale incidents in the telecommunications, platform, and financial services sectors. The changes will take effect six months after enactment, subject to transitional provisions.

As per the amended provisions, the Personal Information Protection Commission (PIPC) can impose administrative fines of up to 10% (earlier 3%) of a company’s total revenue in serious cases, where a company:

intentionally or through gross negligence repeats a violation within three years;
engages in grossly negligent or intentional conduct affecting 10 million or more individuals; or
fails to comply with a PIPC corrective order and a breach occurs.

Lower penalties may apply where companies demonstrate strong investment in data protection measures such as staffing, systems, and security upgrades.

The amendments also expand reporting obligations to cover incidents involving data falsification, alteration, or damage. Early notification will be required in some cases where the risk is high. Responsibility for data protection is formally placed on senior leadership. Further, the appointment of the Chief Privacy Officer should be intimated to the regulator in case of a certain organization.

Implication:

Companies should note the above changes and review their data protection policies and compliance frameworks to avoid penalties.

South Korea:Employers required to pay interest in case of delay in payment of wages.

South Korea has amended the Labour Standards Act to extend the obligation to pay interest for the delay in the payment of wages to all employees, effective from October 23, 2025.Previously, interest liability arose only in the case of retired employees.

Under the revised rule, employers must pay wages on a fixed payday. In case of delay, interest would accrue from the day after a missed payment until full settlement. The applicable interest rate is currently set at 20% per annum, subject to a statutory cap of 40%.

Implication:

Employers should review payroll, tax, and compliance processes to ensure timely payment to avoid interest liability.

Spain

Spain: Spain introduces mandatory B2B e-Invoicing.

On March 24, 2026, the Spanish Council of Ministers approved a Royal Decree setting out the rules for mandatory electronic invoicing under Law 18/2022 (Ley Crea y Crece).

The key features are as under:

E-invoicing will apply to all business-to-business (B2B) transactions in Spain. Transactions with consumers (B2C) and cross-border transactions are not covered.
Under the new system, invoices must be issued in a structured digital format, and PDF or Excel files sent via email or paper files will not suffice.
Businesses will also need to report invoice status electronically, including whether invoices are accepted, rejected, and when they are paid. This information must generally be shared within four days of each event.
Companies can use either a public platform provided by the tax authority or approved private platforms, as long as they are compatible with the public system.
Implementation timeline is as under:
- Businesses with turnover above EUR 8 million: 12 months after publication of the Ministerial Order.
- all other businesses: 24 months after publication of the Ministerial order.
During the first 12 months of application, invoices must generally be shared in both structured format and PDF, unless the recipient agrees to receive only the electronic format.

Implication:

Businesses should review and update their invoicing systems and accounting processes to ensure readiness for structured e-invoicing and real-time invoice tracking requirements.

Spain: Increase in Solidarity Contribution Rates from 2026

Spain announced an increase in the solidarity contribution rates for 2026, which applies in case of employees having salaries more than the maximum social contribution base. Previously set at 0.92%, 1%, and 1.17%, the rates have now risen to 1.15%, 1.25%, and 1.46%, depending on income levels above the maximum contribution base effective from January 2026.

The additional solidarity contribution is an extra Social Security charge that applies to high earners. It is only calculated on the portion of salary that exceeds the annual maximum contribution base.

With the maximum base set at EUR 5,101.20 per month, the updated rates apply as follows:

1.15% on earnings between EUR 5,101.20 and EUR 5,611.32 (0.96% employer, 0.19% employee)
1.25% on earnings between EUR 5,611.32 and EUR 7,651.80 (1.04% employer, 0.21% employee)
1.46% on earnings above EUR 7,651.80 (1.22% employer, 0.24% employee)

Implication:

Employers should note the above changes and ensure that their payroll systems are updated to correctly apply the revised solidarity contribution rates on salaries exceeding the maximum base.

Sweden

Sweden: Tax and other changes for the year 2026 – Highlights

Various tax and other changes have come into force in the year 2026. Many of these were proposed in the autumn budget, which was presented in September 2025.

The key changes are as under:

The special income tax for non-residents was reduced from 25% to 22.5% of taxable income (excluding seafarers’ income) from January 1, 2026. The rate will be further reduced to 20% from January 1, 2027.
The deduction for costs related to travel between home and workplace would be deductible only in case of cost exceeding SEK 15,000 (2025: SEK 11,000)
From April 1, 2026, employers will pay reduced social security contributions when hiring young people aged 19 to 23.
- For salaries up to SEK 25,000 per month, the total employer contribution will be 20.81%.
- For any salary above SEK 25,000 per month, the normal rate of 31.42% is applicable.
VAT rate on food items reduced from 12% to 6% for the period from April 1, 2026, to December 31, 2027.
From January 1, 2026, Sweden has expanded the rules for VAB (temporary parental leave for care of a sick child), allowing parents more flexibility to take paid time off work. Previously, VAB was only available when a child was ill. Under the new rules, it can also be used in additional situations, including:
- attending meetings at a preschool or school to support staff in understanding a child’s special needs;
- taking part in meetings related to a child’s illness or disability;
- participating in social services’ assessments or investigations regarding a child’s need for protection or support.
The target age for retirement will be raised from 66 to 67 years, with effect from January 1, 2027. This affects the earliest age at which a public pension with full benefits and certain age-related tax advantages can be accessed.

Implication:

Businesses should evaluate the impact of the aforesaid changes on their profits and processes.

Thailand

Thailand: Enhanced verification requirements for company registered addresses.

Effective from January 1, 2026, the Department of Business Development (“DBD”) has introduced stricter verification rules for registering or updating the head office addresses of limited companies. Under the new requirements, the registered address will be checked against Thailand’s national civil registration database to confirm that details such as house number, building, and location match official records. If discrepancies are found or the address cannot be verified, the registrar may delay or reject the application.

Additional checks will apply where an address is used by multiple companies. If five or more entities are already registered at the same address, further supporting documents may be required, including:

A consent letter from the property owner or lawful occupier
Proof of the right to use the premises (such as a title deed or lease agreement)

These changes do not prohibit multiple companies from sharing an address, but aim to ensure that such arrangements are properly documented and legitimate.

Implication:

Businesses should note the stricter address verification rules and ensure compliance to avoid delays or rejection at the time of incorporation or for updating registered office addresses.

Thailand: Stricter documentation requirements for certain company incorporations

On December 1, 2025, the Department of Business Development (“DBD”) issued Order No. 2/2568, introducing stricter documentation requirements for certain company registrations. The new rules, effective from January 1, 2026, apply to specific foreign-related structures. These include joint ventures where foreign shareholders hold less than 50% of the registered capital (such as a 49% foreign and 51% Thai structure), as well as Thai-owned companies where a foreign national is appointed as an authorized director with signing authority. Companies outside these scenarios are not affected. Under the new rules, Thai shareholders must provide stronger evidence of their financial capacity at the time of incorporation. Bank balance certificates alone will no longer be accepted. Instead, shareholders are required to submit three months of bank statements covering a continuous period prior to the share subscription payment. These statements must clearly show a transaction that matches both the amount and date of the investment. In addition, the transaction history should demonstrate that the funds are genuinely owned by the shareholder and not temporarily deposited for the purpose of company registration. These measures are intended to improve transparency and ensure the legitimacy of invested capital.

Implication:

Promoters should note the stricter documentation requirements and ensure proper financial evidence is available in advance to avoid delays in company registration.

UAE

UAE: Mandatory national e-invoicing system pilot phase to begin in 2026.

The UAE Ministry of Finance will begin the pilot phase of its e-invoicing system on July 1, 2026. This initial stage will include a selected group of taxpayers for testing, after which the system will be introduced in three mandatory phases.

Businesses with annual revenues of AED 50 million or more must choose an approved service provider by July 31, 2026, and fully adopt the e-invoicing system by January 1, 2027.
Companies with annual revenue less than AED 50 million per year are required to appoint a provider by March 31, 2027, and complete implementation by July 1, 2027.
Government entities must also select an accredited provider by March 31, 2027, with full compliance required by October 1, 2027.

Implication:

Companies should take note of the upcoming e-invoicing requirements introduced by the UAE Ministry of Finance and assess their organization’s readiness for compliance within the prescribed timelines.

United Kingdom

UK: Significant employment law changes take effect in 2026

The United Kingdom Government has passed regulations bringing the provisions of the Paternity Leave (Bereavement) Act, 2024 into effect from December 29, 2025. The government also made the Employment Rights Act 2025 (Parental and Paternity Leave) (Removal of Qualifying Periods etc.) (Consequential Amendments) Regulations 2026 to give effect to certain provisions of Employment Rights Act, 2025.

The Key changes/ provisions in this respect are as under:

The government has launched a new Fair Work Agency with effect from April 7, 2026, which acts as a single enforcement agency consolidating the Employment Agency Standards Inspectorate, the Gangmasters and Labour Abuse Authority, and HMRC’s National Living and Minimum Wage. In the future, the Agency will also take over enforcement of other rights like holiday pay. The Agency has the right to investigate breaches and levy penalties.
The Government made regulations to make paternity leave and unpaid parental leave a ‘Day one’ right. Fathers/adopters would be able to take paternity leave even if they have already taken shared parental leave. The requirement to give notice to employers of the intention to take leave by the 15^th week before the expected week of childbirth and 28 days’ notice before the intended leave date will be relaxed in case of expected birth between April 5 to July 25, 2026. In such cases, 28 days’ notice would be sufficient.
Fathers, partners of mother or adopters of a child where the mother or primary adopter dies at the time of birth or within one year from birth or adoption, are now entitled to paternity leave without a requirement to complete 6 months of service. As per the regulations, the bereaved partner will be entitled up to 52 weeks of paternity leave if they have the main responsibility for the upbringing of the child. Where the child also dies, paternity leave can be taken up to 8 weeks after the child’s death. The extended rights are available for children born after April 6, 2026.
As per the provisions of the Employment Rights Act, 2025, the employees are eligible for the statutory sick pay from day one of the sickness. Earlier, it could not be claimed for the first three days of sickness. Weekly statutory sick pay will be 80% of normal weekly earnings or the prescribed weekly rate (GBP 123.25), whichever is lower. The lower earnings limit has been abolished.
Family-related statutory payments, including maternity, paternity, and related benefits, have increased to GBP 194.32 (previously GBP 187.18) per week from April 6, 2026, across the UK.
From April 6, 2026, the employer is required to maintain adequate records of workers’ annual leave and pay entitlement. The records must be maintained for a period of 6 years from the date of creation. Employers can decide the manner and format in which such records are to be maintained. Non-compliance with this requirement can lead to fines.

Separately, Northern Ireland has introduced a new right to paid miscarriage leave, allowing eligible employees to take two weeks’ leave following pregnancy loss before 24 weeks. The leave will be paid at the statutory rate of GBP 194.32 per week or 90% of the employee’s normal weekly earnings, whichever is lower. This is a day-one right and does not require medical evidence.

Implication:

Employers need to review their human resources and payroll policies in light of the above changes and make suitable updates to them. Employers should maintain adequate records of annual leave and pay entitlement to avoid penalty.

UK: HMRC publishes guidance regarding registration of tax advisors

The UK’s His Majesty’s Revenue and Customs (“HMRC”) has published a guidance on February 17, 2026, regarding the requirement to register as tax advisors.

The key provisions are as follows:

Individuals or legal entities who interact with HMRC about someone else’s tax affairs and get paid for it would be considered tax advisors. Such interactions include phones, emails, posts, messages through GOV.UK website or HMRC website, or sending returns, claims and other documents. Registration needs to be done for an agent service account. The requirement will apply even if the person does not consider itself as tax advisor or the interaction is for only one client or business is based out of the UK. This requirement does not apply to employees and in-house tax teams.
HMRC will introduce an online registration system for agent service accounts which will replace the existing system. Those who are already registered are not required to register again.
Where the agent has self-assessment or corporate tax account, they need to register from August 18, 2026. In case of payroll processing, the registration will begin from November 18, 2026, while financial service organizations need to register from December 18, 2026. HMRC has provided a 3-month registration period.

Implication:

Businesses can check if their advisors are duly registered with HMRC.

UK: Mandatory payrolling of benefits in kind applies from April 2027

HMRC has confirmed that from April 2027, employers will be required to report and tax most benefits in kind (“BIK”) through payroll, replacing the current system of annual reporting via Forms P11D. P11D reporting will continue for the 2025–26 and 2026–27 tax years, after which mandatory payrolling of benefits will apply from April 2027.

Key changes include:

Mandatory real-time reporting:
Most employee benefits will need to be reported and taxed through payroll in real time instead of annual reporting.
Limited use of P11D forms:
P11Ds will generally no longer be required from April 2027, except for specific benefits such as employment-related loans and accommodation.
Increased data and reporting requirements:
Employers must capture and report detailed benefit data each pay period, including adjustments for joiners, leavers, and changes in benefits.
Employee notification requirement:
Employers must inform employees in writing that benefits are being payrolled by June 1 following the end of the relevant tax year, including details of the benefits and how they will be taxed.

Implication:
Employers will need to update payroll systems and processes to report employee benefits in real time instead of annually.

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