As 2024 nears its end, it is time for our annual tax update. This update focuses on the tax trends and developments we foresee for 2025 and includes tips and takeaways.
In this update, our specialists inform you about relevant current tax developments and trends in the EU, the Netherlands, Belgium, Luxembourg, and Switzerland that impact MNEs.
Our specialists start with a view on the role of taxation in European tax policy. Subsequently, an comprehensive overview of European and international tax developments is given, followed by those in the Netherlands, Belgium, Luxembourg, and Switzerland. You will appreciate that the nature of these developments differs per country, so our aim has been not to discuss the same topics for each country.
The future tax landscape
The role of taxation in European tax policy becomes more important
The EU's ambitious tax agenda received a reality check over the past year, which was a year of substantial organisational changes in the EU. The European elections in June 2024 resulted in a European Parliament that, although retaining its pro-EU majority, is more fragmented across the political spectrum than before. Over the past year, the EU's top political priorities seem to have shifted towards boosting competitiveness and securing Europe's relevance on the global stage. Draghi's report on the "Future of European competitiveness", published in September 2024, is noteworthy in this respect.
The new EU Commissioner for taxation, Wopke Hoekstra, will face the challenge of balancing the EU's ambitious tax agenda with the unanimity requirement in the Council of the EU. We have not seen material developments in 2024 regarding many of the tax proposals released in previous years, such as Unshell, Transfer Pricing, Business in Europe: Framework for Income Taxation ("BEFIT") and Home Office Taxation ("HOT"). In addition to tracking progress, we are curious to see whether the European Commission has the political ambition to withdraw tax proposals and develop new ones. We may furthermore see discussions on whether the win of the European Commission in the Apple State aid case will lead to new investigations of tax rulings.
Another major political battle on the horizon is the EU's next long-term budget, for which negotiations are expected to start in 2025. The Commission wants an EU budget that is policy-focused, easy to access and flexible. Moreover, in 2028 the repayments of the EU's economic recovery fund ("Next Generation EU") are scheduled to start, and such repayments would come directly from the EU's own budget. This means that proposals for new own resources for the EU will be a hot topic in 2025. So far, EU Member States have not made progress on the 2023 package of proposals for new EU own resources. It is almost certain that, either behind closed doors or in the public debate, the question will be raised which role taxation could play in contributing to the EU's investment capacities and climate ambitions and in repaying the EU's debts.
Finally, the recent election of Donald Trump as president of the United States could be an impactful moment for the success of the Pillar One and Pillar Two projects of the OECD. If the Pillar One project would not advance, the European Commission may consider proposing a digital services tax (mindful of the proposed directive released in 2018).
In conclusion, 2025 promises to be a very interesting year for taxation. We will continue monitoring these developments for you.
Please download the full version of our tax update.
Tax trends and developments for MNEs in 2025 (pdf)
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
