Indirect Tax
India-New Zealand Free Trade Agreement (FTA)
Excerpts from various sources
Signed in April 2026, the agreement aims to increase bilateral trade to USD 100 billion by 2030. New Zealand will provide 100% duty-free access on all Indian tariff lines. India will liberalize tariffs on ~95% of imports, while excluding sensitive sectors such as dairy and select agricultural products. The agreement provides for expedited customs clearance (within 48 hours) and a transition to paperless trade systems. It includes strict Product-Specific Rules of Origin (PSRs) to prevent circumvention. A USD 20 billion investment commitment and enhanced mobility for professionals and students form part of the broader framework.
EU Carbon Border Adjustment Mechanism (CBAM)
Excerpts from various sources
The EU Carbon Border Adjustment Mechanism (CBAM) is a regulatory levy that equalizes carbon pricing between domestic products and imports, transitioning to a definitive phase with financial obligations on 1 January 2026. As an expansion of indirect tax, it requires importers of goods like iron, steel, and cement to report embedded emissions and surrender certificates, leveraging cross-border tax expertise to manage compliance and data verification. The measure aligns with the EU’s target to reduce greenhouse gas emissions by at least 55% by 2030.
Update on excise tax measures relating to incentives for electric vehicles in Thailand
Excerpts from various sources
Thailand is promoting the transition to electric vehicles through tax incentives and subsidy schemes. Policies aim to increase domestic value addition and position Thailand as a regional EV manufacturing hub. The excise tax regime has been revised to link tax rates with CO2 emissions and the adoption of clean technologies.
Australia–European Union FTA signed
Excerpts from various sources
Australia and the European Union concluded negotiations for a Free Trade Agreement (FTA), eliminating over 99% of tariffs on EU exports. This deal is expected to save EU businesses approximately EUR 1 billion annually in duties, particularly benefiting sectors like machinery, chemicals, and motor vehicles. Almost all EU tariffs on agricultural products will be eliminated, including Australian wine, seafood, nuts, dairy, wheat, barley, and olive oil. The luxury car tax (LCT) will be amended to introduce a threshold for zero-emission vehicles. This will exempt approximately 75% of imported EU electric vehicles from LCT.
Transfer Pricing
United States: U.S. APMA program, APA statistics for 20254
Excerpts from various sources
The Internal Revenue Service (IRS) published Announcement 2026‑8, its 27th annual report on the Advance Pricing and Mutual Agreement (APMA) Program, summarizing APA activity and program operations for calendar year 2025. The report describes program experience and provides statistics and descriptive trends.
Since 1991, APMA has executed 2,676 APAs (through 2025). In 2025, APMA executed 110 APAs (14 unilateral, 90 bilateral, and 6 multilateral agreements). Key counterparties continued to include India and Japan, which together formed a notable share of bilateral APA activity (both for executed APAs and the pending inventory).
The report highlights that, in the majority of APAs, the covered transactions involve numerous business functions and risks, and service transactions were the most common transaction type among the executed APAs.
In relation to transactions involving the sale of tangible property and the use of intangible property, the Comparable Profits Method/Transactional Net Margin Method (CPM/TNMM) remained the most widely used transfer pricing method (used in 86% of such cases).
Where APAs executed in 2025 involved the CPM/ TNMM with a North American-tested party, Standard & Poor’s Compustat/ Capital IQ remained the most widely used data source for selecting comparables.
Operationally, APMA reported 108 personnel at year’s end and 622 pending APA requests, indicating sustained demand for advance pricing certainty. The average completion time for APAs executed in 2025 was 44.1 months overall, with new APAs averaging 49.8 months and renewals averaging 38.2 months. Most APAs executed had terms of five years or more, and 23% included rollback years.
Overall, the 2025 APMA Report demonstrates the IRS’s ongoing commitment to promoting certainty and supporting international cooperation through the APA process.
Serbia: Adopted rulebook on arm’s length interest rates for 2026
Excerpts from various sources
On 24 April 2026, Serbia’s Ministry of Finance (MF) adopted the Rulebook on interest rates deemed to be in accordance with the arm’s length principle for 2026, published in the Official Gazette No. 36/2026 and effective from 2 May 2026.
The rulebook prescribes separate interest rates for long-term and short-term borrowings for all non-financial entities, and a single interest rate for banks and finance leasing companies (except for RSD-denominated loans, for which separate interest rates are prescribed for short-term and long-term loans).
Impact of the Rulebook on transfer pricing documentation for 2026
Under Article 61 of Serbia’s Corporate Income Tax Law, taxpayers determining arm’s length interest income/expense for related‑party financing may either apply:
- Interest rates prescribed by the MF Rulebook (safe harbor), or
- General OECD-based methods for assessment of arm’s length interest as prescribed by the CIT Law.
Taxpayers must choose one of the above approaches and apply it consistently across all intercompany loans.
| Loan Currency | Banks & Finance Leasing | Other Companies | ||
| Short-Term | Long-Term | Short-Term | Long-Term | |
| RSD | 4.40% | 0.33% | 7.13% | 7.21% |
| EUR | 4.87% | 4.75% | 5.42% | |
| USD | 4.98% | - | 4.43% | |
| CHF | 3.05% | - | 7.10% | |
| SEK | 4.12% | - | - | |
| GBP | 1.50% | - | - | |
| RUB | 10.73% | - | - | |
The Rulebook provides a practical safe harbor for intercompany financing, but taxpayers should evaluate whether the prescribed rates align with their actual financing profile and consider whether an OECD‑based benchmarking approach may be more appropriate for significant or long‑term related‑party funding arrangements.
Pillar Two is no longer aspirational – jurisdictions are moving rapidly from policy intent to operational execution
Excerpts from various sources
Recent updates across regions show increased emphasis on compliance mechanics, administrative alignment, and technical refinements required to run the rules in practice.
Multiple jurisdictions have released filing guides, draft return formats, schemas, and procedural instructions covering elements such as GloBE Information Return (GIR), top‑up tax returns, and related notifications. These developments indicate that tax administrations are preparing for live compliance cycles and that groups should expect jurisdiction‑specific processes and deadlines.
Within the European Union, coordination is being strengthened through DAC9, which establishes a framework for the automatic exchange of Pillar Two return information among Member States, enhancing transparency and consistency in administration.
In parallel, jurisdictions are issuing detailed technical guidance to address real‑world application issues (e.g., safe harbors, allocation mechanics, and interpretational points), reflecting the practical challenges of implementing complex model rules.
Overall, the trajectory suggests Pillar Two is entering an operational phase, shifting the focus for MNEs toward systems readiness, data governance, and consistent positions across jurisdictions.