International taxation is undergoing a fundamental transformation. Whereas businesses were able for many years to organise their international structures around favourable tax rates and treaty benefits, the focus from the summer of 2026 onwards is increasingly shifting towards transparency, economic substance and global minimum taxation.
Tax developments are no longer limited to isolated national measures but are the result of a coordinated approach by the OECD and the European Union. For internationally active businesses, five developments are particularly significant.
1. Pillar Two Becomes an Operational Reality
The most significant tax development is undoubtedly the practical implementation of the OECD Pillar Two rules.
Since the Belgian Act of 19 December 2023, multinational enterprise groups with consolidated annual revenues of at least EUR 750 million have been subject to a global minimum effective tax rate of 15%. From the summer of 2026 onwards, however, the focus shifts from legislation to practical compliance.
The Belgian tax authorities have made the filing forms, the GloBE Information Return (GIR) and the procedures relating to the Qualified Domestic Minimum Top-up Tax (QDMTT) and the Income Inclusion Rule (IIR) available. The first returns and notifications must be submitted during 2026.
For multinational groups, this means that they must not only calculate their effective tax rate in every jurisdiction in which they operate, but also prepare extensive reporting and implement entirely new compliance processes. Consequently, the choice of a holding company location will depend less on low corporate tax rates and increasingly on factors such as legal certainty, treaty protection and the ability to demonstrate genuine economic substance.
2. Increased Reporting Obligations under DAC9
A second important development is the implementation of the DAC9 Directive.
This European Directive complements Pillar Two by establishing a uniform framework for the automatic exchange of the GloBE Information Return between tax administrations throughout the European Union. Its objective is to avoid duplicate reporting while significantly strengthening administrative cooperation between Member States.
For businesses, this means that tax information will be exchanged more rapidly and more systematically among tax authorities. International tax structures will therefore become considerably more transparent, while the likelihood of coordinated cross-border tax audits will increase.
3. Economic Substance Becomes Decisive
Where tax planning previously focused primarily on favourable tax rates, attention is now increasingly shifting to whether a company has genuine economic substance.
Tax authorities are scrutinising far more critically whether a holding company is effectively managed from its country of residence, has adequate personnel, financial resources and office facilities, and independently takes strategic business decisions.
Holding companies established solely to channel dividends or royalty income will find it increasingly difficult to rely successfully on tax treaty benefits or European directives. Businesses will therefore need to strengthen the documentation supporting their international structures and demonstrate that they perform genuine economic functions.
4. Stricter Application of International Anti-Abuse Rules
The application of international anti-abuse provisions continues to intensify.
The combined effect of the ATAD Directives, the Principal Purpose Test (PPT) contained in the OECD Multilateral Instrument and the existing DAC6 mandatory disclosure rules means that tax structures are increasingly assessed on the basis of their economic justification.
The key question is no longer merely whether a structure is legally permissible, but whether it is supported by sufficient commercial rationale.
For internationally active businesses, this means that traditional holding structures, financing companies and royalty companies are increasingly likely to become the subject of tax audits. Proper documentation of commercial objectives and operational activities has therefore become at least as important as the underlying tax analysis itself.
5. The End of Tax Competition as the Primary Location Criterion
One of the most fundamental changes is that tax rates are gradually losing their importance as the decisive factor when selecting a business location.
With the introduction of a global minimum effective tax rate of 15% for large multinational groups, much of the benefit previously obtained by locating profits in low-tax jurisdictions disappears. If a group entity is taxed below the 15% threshold, another jurisdiction may levy a top-up tax to bring the effective tax rate up to the minimum level.
As a result, international competition between jurisdictions increasingly focuses on other factors, including:
- the quality of corporate law;
- legal certainty;
- an efficient judicial system;
- an extensive tax treaty network;
- the availability of specialised legal and financial services; and
- political and economic stability.
A New Tax Reality
For internationally active businesses, the second half of 2026 does not primarily mean a higher nominal tax burden, but rather a fundamentally different approach to international business operations.
Tax planning is evolving from tax optimisation towards risk management and compliance. Multinational groups are investing increasingly in transfer pricing documentation, internal tax control frameworks, substance requirements and reporting systems. At the same time, cooperation between tax administrations continues to intensify, resulting in cross-border structures being reviewed more quickly and from an increasingly international perspective.
The era in which international holding companies were established primarily for tax purposes appears to be largely over.
Conclusion
Successful international businesses will distinguish themselves through an integrated approach in which taxation, corporate law, corporate governance and economic reality are closely aligned.
International structures that are supported by genuine business activities, effective governance and transparent reporting will be significantly more resilient in the face of increasingly stringent international tax rules than structures established primarily for tax purposes.
Vanbelle Law Boutique has been assisting international entrepreneurs for more than three decades in designing the legal and tax structures best suited to their cross-border business activities.
