Global energy, utilities and resources tax update – June 2025 to December 2025

From 1 January 2026, South Africa implemented Phase 2 of the South African carbon tax rules. In this phase, National Treasury repealed the electricity generation levy and will instead tax generators’ fuel-combustion emissions under the Carbon Tax Act. 

The measure preserves electricity price neutrality to 31 December 2030 by retaining the capped renewable-energy premium deduction equivalent to what would have been paid under the electricity generation levy. The public welcomed this change as it provided some relief due to expected higher electricity prices. The incoming mandatory carbon budget system will apply a higher carbon tax rate (ZAR 640/tCO2e (~33 EUR)) on Scope 1 emissions above the carbon budget allocated to a taxpayer, with no allowances being allowed to be claimed.  

The Carbon Tax Act will also be amended to allow refunds of carbon tax paid at the higher rate over the five-year carbon-budget cycle where entities meet their cumulative budgets. The commencement date will be published by notice in the Government Gazette.  

At the standard carbon tax rate, the tax-free allowances continue to provide relief to taxpayers, including a five percent increase to the offset allowance from 2026 (to 15% for fuel combustion activities and 10% for process/fugitive emissions). Lastly, technical changes are being made to the calculation of emissions by updating emission factors, net calorific values and clarified fugitive-emissions formulas. 

Please refer to here for more information. 

The DRM was implemented to refund the General Fuel Levy (GFL) and Road Accident Fund (RAF) levy to primary producers that use diesel away from public roads. The objective was to support the international competitiveness of these sectors and ensure fair treatment between road and non‑road users. 

The scheme applies to land‑based activities in mining. In practice, claims have been subject to a standard cap whereby only 80% of total diesel purchases have been treated as eligible, with the remaining 20% regarded as non‑eligible (such as private use or transport not meeting the criteria set out in the Customs and Excise Act, 1964).The fixed 20% disallowance was introduced as a control to curb potential misuse. 

The Government now proposes to calculate refunds on the actual litres used in qualifying activities declared to the South African Revenue Service, removing the blanket reduction. This shift is intended to simplify administration, realign the scheme with its original purpose, and deliver additional relief to taxpayers. The effective date of this amendment will be 1 April 2026.

The DRC was introduced to curb abuse of the VAT system (including refund fraud) in the domestic gold value chain and took effect on 1 July 2022, with subsequent amendments effective 1 January 2024 and 1 April 2025. The DRC shifts the liability to account for output VAT on certain domestic supplies of valuable metal from the supplier to the recipient, provided that both parties are registered vendors. This is only applicable when the supply comprises “valuable metal” (as defined), and VAT at 15% is levied. 

The term “valuable metal” is defined to cover goods containing gold in specific forms, subject to certain exclusions and a de minimis rule. Covered forms include goods containing gold in the form of jewellery, bars, blank coins, ingots, buttons, wire, plate, sponge, powder, granules, in a solution, sheet, tube, strip, rod, residue, or similar forms. In prior amendments, the definition of “valuable metal” was updated to remove the exclusion of goods that come from raw materials directly mined by a “holder” under the Mineral and Petroleum Resources Development Act. 

This resulted in the primary mining industry forming part of the DRC. Further, the supply of goods containing gold in various forms excludes supplies where the valuable metal contains less than 1% of gold in gross weight. 

The draft amendments to the DRC Regulations propose to amend this exclusion by limiting the 1% to certain industries which do not include the mining industry. This could potentially impact primary miners of gold and platinum. The proposed effective date of the amendment is 1 April 2026.  

However, as there was confusion with the latest versions of the draft DRC Regulations, such regulations would be published again for public comment. The final version of the DRC Regulations may therefore be different once finally published.

Refineries mainly process and smelt precious metals (like gold and silver) or ore from customers for sale and/or export. During refining, metals lose their original identity, creating challenges for depositors to provide proof for zero-rating of VAT on each transaction. Refineries often act as agents when selling or exporting on behalf of depositors and the VAT Act places the responsibility of obtaining and retaining the required documentation for exports, on the agent. 

The VAT Act currently only caters for the export documentation of gold; however, since silver faces the same challenges, with effect from 1 April 2026, this rule will also extend to silver.

In June 2025, the Federal Government of Nigeria signed four tax bills into law (the Acts), whilst also deferring the start date for two of the Acts (the Nigeria Tax Act and Nigeria Tax Administration) to 1 January 2026. 

The Acts have consolidated the provisions of the previous Petroleum Industry Act and also repealed other provisions, such as the Petroleum Profit Tax Act and Deep Offshore and Island Basin Act.

The following key changes were introduced:

• Definition of a Nigerian Company: Introduced the concept of central management, effective place of management.

• Mining Sector Royalty Compliance: As part of the enhanced mining tax regime under the Act, mining companies are now required to file mineral resources royalty returns.

• Harmonisation of the capital gains rate with income tax rate: Chargeable gains from the divestment of assets are now subject to a 30% income tax rate.

• 5% Fossil Fuel Surcharge: A 5% surcharge will be imposed on fossil fuel products at the point of sale to discourage consumption and promote cleaner energy initiatives.

• VAT Exemptions: CNG, LPG, and other clean-energy products are exempt from VAT under the VAT Modification Order, promoting the use of gas-based transport and the adoption of cleaner energy.

• Power Sector VAT Incentives: VAT waivers on renewable energy equipment have been introduced, and a 5% surcharge applies on fossil fuels used in utilities. 

• Energy Sector Tax Incentives: The Presidential Directive 40, now enacted into law, extends fiscal incentives for upstream and midstream gas activities as well as deep offshore oil operations, while a cost efficiency order promotes greater efficiency in upstream processes.

The 2026 Tax Plan was introduced in September 2025 and includes several changes that affect the EU&R sectors. 

Currently, the Netherlands imposes a national CO₂ levy in addition to the EU Emissions Trading System (EU ETS). Under the new Tax Plan, the rate of the CO₂ levy will be reduced and is projected to fall below the EU ETS level starting in 2027, as a result, effectively no levy will be due. The incoming government is expected to eliminate the levy altogether. However, for waste incineration facilities (AVIs), the CO₂ tax will increase.

Multiple subsidies and tax incentives exist to support investments in sustainability, including the SDE++, EIA, and MIA programs. In 2026, the government will allocate 150 million euros to continue the Indirect Cost Compensation ETS Subsidy Scheme through to 2028. Additionally, 230 million euros will be invested in new Important Projects of Common European Interest (IPCEI) programs, with a particular focus on the semiconductor industry.

If you need a more detailed summary of all the measures included in the 2026 Tax Plan, please refer here or reach out to Chris.

There were changes to the regulations of the excise duties applicable to the gas and electricity sectors under Legislative Decree No. 43/2025. The key changes are as follows: 

• New Classification for Natural Gas Uses: The current categories “civil uses” and “industrial uses” are replaced by “domestic uses” and “non-domestic uses,” ensuring clearer application of different excise rates.
• Semi-Annual Declarations: Starting from 2026, companies supplying natural gas and electricity to end consumers must submit consumption declarations twice a year (by the end of March and September), instead of annually.
• Monthly Excise Payments: The instalment payments for excise duties will now be calculated on a monthly basis with reference to the actual quantities sold or self-consumed in the previous month, replacing the old system of fixed advances based on prior-year tax and later adjustment.
• Introduction of Accredited Excise Payers (SOAC - GE): The category of “SOAC – GE” excise payers is introduced, which will include qualifying reliable domestic energy and gas operators recognized by the Customs & Monopolies Agency. The accreditation as a SOAC-GE excise payer will be granted based on financial solidity, compliance history and organizational structure and will offer benefits including exemptions from providing guarantees and simplified compliance fulfilments.

Please refer to here for more information 

From 2026 “Hyper-depreciation” (Budget Law 30 December 2025, No. 199) will replace the existing “Industry 4.0” and “Transition 5.0” tax credits. This marks a shift from tax credits to an enhanced depreciation mechanism for eligible investments, offering increased deductions of the acquisition cost of qualifying assets for income tax purposes, including equipment and renewable energy systems for self-consumption, produced in the EU/EEA and used in Italy.

For investments made between 1 January 2026 and 30 September 2028 the relevant acquisition cost is increased as follow:

• +180% for investments up to €2.5 M; 
• +100% for investments from €2.5 M to €10 M; 
• +50% for investments from €10 M to €20 M.

A new tax credit (Budget Law 30 December 2025, No. 199), modelled on the “Transition 5.0” tax credit (Art. 38, DL 19/2024), is granted to companies qualifying as high electricity or gas consumers for 2025. It applies to investments made in 2025 in new tangible and intangible assets (listed in Annexes A and B, Law 232/2016).

The credit is subject to implementing rules via ministerial decree and capped at €10m for 2026. It can only be used for offsetting against other taxes and is not cumulative with other incentives on the same costs.

Italy has enacted Law No. 182/2025, published on 3 December, addressing a long-standing issue for photovoltaic operators who previously combined the “Tremonti Ambiente” tax relief with feed-in tariffs under the 3rd, 4th, and 5th Conto Energia programs which was later deemed incompatible.

The new law provides a clear and penalty-free path to regularization. Companies that benefited from both incentives can apply within 60 days from 18 December 2025 (i.e., by 16 February 2026) to offset the feed-in tariffs by the amount of the tax benefit received. Instead of interest or fines, the mechanism applies a 5% reduction on tariffs for the entire contract duration. 

The repayment amount must be certified by an independent professional. This measure also closes all pending tax and administrative disputes related to the issue, offering legal certainty and reducing litigation risk.

• The Energy Profits Levy (“EPL”), a temporary measure introduced in 2022 to tax extraordinary profits made by oil and gas companies in the UK (currently at a 38% rate), remains in place until 2030 (or earlier if triggered by the Energy Security Investment Mechanism price floor).
• The EPL will be followed by an Oil and Gas Price Mechanism (“OGPM”), a permanent mechanism that will apply an additional tax rate of 35% to relevant revenues when oil and gas prices are ‘unusually’ high (26/27 - oil: over $90 per barrel, gas: over 90 pence per therm).
• The government plans to add an exemption from the Climate Change Levy (“CCL”), an environmental tax on energy, for electricity used in the electrolysis step to produce hydrogen.
• The UK government will introduce a Carbon Border Adjustment Mechanism (“CBAM”) from 1 January 2027 (indirect emissions inclusion delayed until at least 2029) which will place a carbon price on imports of carbon-intensive goods with the aim of preventing carbon leakage.
• The UK Emissions Trading Scheme (“ETS”) will expand to international maritime routes from 2028.

• Corporation tax compliance – From 1 April 2026, the fixed-rate penalties for taxpayers submitting a corporation tax return late will be doubled to £200 for a return filed up to 3 months late (£1,000 for three or more successive failures), £400 for a return filed up to 6 months late (£2,000 for three or more successive failures). Note that tax-geared penalties continue to apply for tax returns which are broadly filed more than 6 months (10% of unpaid tax) and more than 12 months (20% of unpaid tax) late.
• Fixed/non-current asset allowances – The main rate of writing down allowances reduces from 18% to 14% in April 2026, alongside a new 40% first-year allowance from January 2026 for certain leased assets. However, 100% tax relief in the year qualifying capital expenditure is incurred should continue to be claimable under specific first year allowances where the relevant criteria are met.
• Personal dividend tax – A 2 percentage point increase to the basic and higher tax rates on dividend income will be implemented from April 2026 (10.75% for basic rate taxpayers and 35.75% for higher rate taxpayers). The additional rate of dividend tax will remain at 39.35%.
• Personal income tax – A 2 percentage point increase to all tax rates on savings income will be implemented from April 2027, being the basic (22%), higher (42%) and additional (47%) tax rates.
• UK withholding tax – Increased rate of withholding tax on interest, increasing by 2 percentage points to 22% (in line with the new savings basic rate of 22%) from April 2027.
• Stamp taxes – A three-year stamp duty reserve tax (“SDRT”) holiday will apply for new listings on the London Stock Exchange, effective from 27 November 2025. This is aimed at improving the relative competitiveness of the UK market as a location for new listings and addressing concerns that the UK’s 0.5% charge on share transfers was acting as a deterrence to listings relative to other markets.

In late December 2025, the European Commission released a range of draft packages and reforms relating to the EU CBAM, which broadly applies a price signal to the embedded emissions of certain products when imported into the EU. 

The proposed measures include:

• expanding the scope of CBAM to bring certain metal ‘combination’ products (such as machinery) into the scope of CBAM, 
• clarification and updates for the calculation methodology for embedded emissions, 
• the creation of a Temporary Decarbonisation Fund to support EU-based intensive industry, at risk of carbon leakage, 
• indicative country and product specific default values, and 
• the introduction of Article 27a, which would provide the regulatory framework for the application of CBAM to be suspended where it was broadly determined to be in the best interests of the EU. 

These measures are in draft and must be considered by the other legislative bodies of the EU, noting they may be applied retrospecively. 

In September 2025 the Draft Rules regulating RHQs were issued for public consultation until 9 October 2025. The final Rules may change upon issuance. Companies with existing RHQs in KSA, as well as those considering establishing one, should carefully assess the Draft Rules and prepare for enhanced compliance, governance, and operational requirements. 

Please refer to here for more information.

In May 2025 ZATCA approved significant amendments to the Saudi VAT Implementing Regulations, published on 18 April 2025, with most changes effective immediately, while VAT grouping applies from 15 October 2025 and the electronic marketplace deemed supplier rule from 1 January 2026. 

The amendments expand VAT grouping eligibility, clarify the scope of taxable services and deemed supplies, introduce stricter rules on business transfers, input VAT recovery, unpaid input VAT adjustments, and credit note timelines, and provide detailed guidance on supplies under customs suspension and within special zones. The new rules also affect electronic marketplaces, VAT refunds (including tourist refunds), exports of services, subsidies, and non-deductible input VAT. 

Overall, the changes increase compliance obligations but provide clearer guidance, requiring businesses to assess impacts, update systems and contracts, and closely monitor further ZATCA guidance.

The newly issued RETT Implementing Regulations, effective from 9 April 2025, maintain the 5% Real Estate Transaction Tax on real estate disposals while introducing important clarifications, exclusions, and exemptions. 

Key changes include the new 30% rule excluding certain share disposals in real estate companies, expanded guidance on determining the tax base (including BOOT projects and long-term usufructs), additional exclusions such as capital increases and property subdivisions, and new exemptions covering M&A transactions, securities trading, and forced liquidation sales (subject to strict conditions). 

The regulations clarify payment responsibility (primarily the seller), payment timelines, sham transaction assessments, refund mechanisms, and objection procedures, while reinforcing ZATCA’s powers to reassess transactions based on fair market value. 

Overall, taxpayers should reassess transaction structures, contracts, and compliance processes to manage risks, secure exemptions where available, and ensure alignment with the updated RETT framework.

The Minister of Finance has announced a six-month extension of the tax amnesty valid through June 2026. 

This amnesty applies to all tax returns of which filing due date was before 1 January 2026. The scope of taxes covered by this initiative remains unchanged and includes:

• Withholding Tax
• Corporate Income Tax
• Excise Tax
• Value Added Tax (including E-Invoicing)
• Real Estate Transaction Tax

Accordingly, taxpayers may benefit from the waiver of penalties in several situations, including but not limited to:

• Revising previously filed returns (e.g., where filings were submitted based on draft financial statements or management accounts and require alignment with finalized statutory financial statements);
• Correcting omissions where payments subject to Withholding Tax were unintentionally excluded; 
• Amending VAT returns that may require revision; and
• Registration of any entity (for instance a Permanent Establishment (PE) with the tax authority, of which registration deadline has passed. 

A key development is the introduction of formal transfer pricing rules under Kuwait’s DMTT Law through Executive Regulations aligned with the OECD Transfer Pricing Guidelines, applying to large MNE Groups with consolidated revenues of at least EUR 750 million. 

The Regulations mandate the arm’s length principle for all related-party transactions, define related persons and control, adopt the five OECD-recognized transfer pricing methods, and empower the Tax Administration to make adjustments where non-arm’s-length outcomes arise. 

New compliance requirements include Master File and Local File submissions upon request and an audited disclosure form filed with the annual tax return. These rules require MNE Groups to reassess and update their transfer pricing policies, including domestic transactions relevant for DMTT and ETR purposes, and to prepare for enhanced compliance and ongoing regulatory developments.

Please refer to here for more information.

Kuwait’s recently issued Executive Regulations for the DMTT under Ministerial Resolution No. (55) of 2025, which supplement the DMTT Law (Decree by Law No. 157) effective from January 1, 2025. 

The Executive Regulations are largely aligned with the OECD GloBE Model Rules and introduce key compliance obligations, including a penalty-free registration window until September 30, 2025, for entities already in scope as of January 1, 2025, and a 120-day registration requirement for entities that come into scope at a later date. These developments underscore the importance for affected groups to assess their scope status, tax liability commencement date, and availability of any safe harbours or exclusions to ensure timely compliance with Kuwait’s Pillar Two framework.

The Government of Kuwait has released the law for the implementation of the Top-up Tax (the “Law”), which marks a significant milestone in the evolution of Kuwait’s tax framework. The Top-up Tax takes the form of a Domestic Minimum Top-up Tax (“DMTT”), and will apply to MNEs that are in scope of Pillar Two. The tax will be imposed in cases where the MNE’s effective tax rate (“ETR”) in Kuwait is below 15%.

The Top-up Tax (hereafter referred to as “DMTT”), is effective for financial years starting on or after 1 January 2025. Notably, the DMTT will only apply to MNEs with global consolidated revenues (in at least two of the preceding four fiscal years) of at least EUR 750m, including MNEs headquartered in and outside Kuwait. The Law will not apply to local businesses with no operations outside Kuwait (see other exclusions below).

In November 2025, The General Tax Authority announced an amendment to the withholding tax reporting framework, introducing an additional mandatory field in the withholding tax form to capture the reference number of the contract notification issued through the “Tax” system, alongside the contract reference related to the payment subject to withholding tax. 

This amendment applies to all contracts, purchase orders, and invoices concluded with non-residents, which must be notified within 30 days from the date of signing or the commencement date of the contract, whichever occurs first, in accordance with Article (13) of the Income Tax Law and Article (37) of its Executive Regulations. 

Taxpayers are therefore required to include the relevant notification reference number in the withholding tax report and clearly link it to the underlying contract, purchase order, or invoice, with the Authority emphasizing strict compliance with these updated requirements to enhance accuracy, strengthen tax compliance, and support ongoing improvements in tax administration efficiency. 

In December 2025 the General Tax Authority announced the opening of the “Tabadol” portal for submitting Country-by-Country Reporting (CbCR) for the fiscal year 2024, as well as the notifications for the fiscal year 2025, with a deadline of December 31 2025. 

This initiative targets taxpayers, accounting firms, and auditors, enabling the relevant authorities to gain a comprehensive and accurate view of the activities of multinational companies. The “Tabadol” portal is an electronic platform dedicated to exchange tax information with relevant authorities in partner jurisdictions, in line with international agreements. 

The General Tax Authority clarified that multinational companies headquartered in Qatar with total revenues of QAR 3 billion or more during the reported fiscal year are required to submit these reports and notifications. All targeted taxpayers are urged to comply with the deadlines and to use the portal to submit accurate information in a timely manner. 

On 27 March 2025, the State of Qatar published in the Official Gazette Law No. 22 of 2024, amending specific provisions of the Income Tax Law (Law No. 24 of 2018) by introducing the Domestic Minimum Top-up Tax (DMTT) and Income Inclusion Rule (IIR) effective starting January 1, 2025.

Executive Regulations on implementation, compliance, and administration are expected to be issued by the General Tax Authority in due course.

Officially effective from 1 January 2025, all other GCC member states have already transitioned from the 8-digit system to the 12-digit system, excluding Saudi Arabia, which had already implemented 12-digit codes previously. ​In line with this, Dubai Customs has published Customs Notice No. (10/2025) dated 23 July 2025, outlining the flexible implementation of the 12-digit Integrated Customs Tariff. 

Abu Dhabi Customs has also announced recently that it will adopt the same tariff structure simultaneously.​ Aligning with a broader GCC initiative to harmonise customs procedures across member states, this transition will run alongside the existing 8-digit system for a six-month flexible period, allowing businesses ample time to adapt.​ 

In the UAE (i.e., Dubai and Abu Dhabi), the transition will start on 1 August 2025 and will be applicable to customs operations conducted under all types of customs declarations whose destination is a GCC country, during the first phase.​

On 28 August 2025, the Ministry of Finance (“MoF”) published Ministerial Decision No. 229 of 2025(“MD 229”) “Regarding Qualifying Activities and Excluded Activities” and Ministerial Decision No. 230 of 2025 (“MD 230”) “On Specification of Recognised Price Reporting Agencies” for the purposes of UAE Corporate Tax Law (“CT Law”). 

Please note that these Decision are effective from 1 June 2023. MD 229 replaces Ministerial Decision No. 265 of 2023 (“MD 265”) which is now repealed. (August 2025).

This decision expanded the scope of commodities falls within the 0% CT regime, removed the limitation of being in “Raw form” form and included Reporting Agencies in addition to prices quoted in recognised commodity market. 

This is a welcoming change as it provides much needed relief for commodity traders, eliminating the limitations set out under the previous decision.

The UAE has issued Cabinet Decision No (142) of 2024 that implements a Domestic Minimum Top-up Tax (“DMTT” or “DMTT Rules”) in the UAE. 

The DMTT will apply to Multinational Enterprises (“MNEs”) that are within scope of Pillar Two based on the OECD Global Anti-Base Erosion (“GloBE”) Model Rules and will be imposed in cases where the MNE’s effective tax rate (“ETR”) in the UAE is below 15%.

The DMTT is effective for financial years starting on or after 1 January 2025. 

H.R. 1 or the One Big Beautiful Bill Act was passed into law 4 July 2025. The primary impacts for US investments were 1) restoration of 100% expensing (bonus depreciation) for tangible assets, 2) 100% expensing for US research and experimentation expenses and 3) favorable change to the limitation on interest deductions. The GILTI (now NCTI) and BEAT rates increased slightly offset by an increase to the benefit under FDII (now FDDEI). In addition, the corporate AMT (CAMT) was adjusted to allow for expensing of intangible drilling costs. 

On the renewable energy side, certain credits were curtailed such as the electric vehicle credit. In addition, to qualify for many of the credits, wind and solar facilities must now be placed in service by 2027. 

Key updates from the 2025 Federal Budget include: 

• Transfer pricing: The federal government plans to modernise Canada’s transfer pricing regime, significantly changing analysis and documentation for taxation years starting after November 4, 2025. See here for more details at ‘Significant changes proposed to Canada's transfer pricing rules’. 
• Mineral exploration tax credit: Extend for two years, applying to flow-through share agreements entered into before April 1, 2027.
• Critical mineral exploration tax credit: Expand eligible minerals for renunciations under flow-through share agreements entered into after November 4, 2025 and before April 1, 2027.
• Canadian exploration expense (CEE): Effective November 4, 2025, expenses for the purpose of determining mineral resource quality exclude costs on economic viability or engineering feasibility. 
• Scientific research and experimental development (SR&ED) and Clean economy investment tax credits enhancements, including: 
  • Clean electricity generation: Expand eligibility and introduce an exception for certain financing. 
  • Clean hydrogen: Add certain pyrolysis of natural gas and hydrocarbons as an eligible hydrogen production pathway.
  • Carbon capture, utilization and storage: Full credit rates extended to 2035; rate review postponed to before 2035.
  • Clean technology manufacturing: Expand eligible minerals; confirm to lower threshold from “substantially all” to “primarily” for eligible property investment costs.

Find out more information here. 

On November 7, 2025, Mexico’s Federal Executive published the 2026 Tax Reform, effective January 1, 2026. The key amendments include:

• Simulated Transactions: The reform intensifies measures against invoices lacking business substance. Consequences for issuing or using them include the cancellation of Digital Seal Certificates and criminal penalties of 2-9 years in prison. Taxpayers must maintain robust evidence of the materiality and business purpose of all transactions.
• Tax Guarantees: The exemption from guaranteeing tax liabilities to suspend collection during an administrative appeal is now abolished.
• New requirements to digital invoices: Invoices covering sale, distribution, or commercialization of Hydrocarbons and Petroleum products when permit data from the National Energy Commission (CNE) is inconsistent / omitted, expired on the transaction date, or non-matching. Triggers also include fuel operations lacking evidence of lawful import or acquisition; digital invoices in these operations must include a valid CNE permit number. Additionally, the Tax Authority may suspend a taxpayer's ability to issue invoices if it determines that any of the aforementioned requirements have not been met.
• Volumetric Controls: Fines are increased for the hydrocarbon sector for non-compliance with reporting of volumetric controls (receiving, deliveries and inventory control) of Hydrocarbons and Petroleum products.

Please refer here for more information.

In November 2025 the Australian Federal Court handed down its decision in Newmont Canada FN Holdings ULC v Commissioner of Taxation (No 2) [2025] FCA 1356 (the ‘Newmont Case’). 

The Newmont Case provided important guidance on the interpretation of ‘Taxable Australian Real Property’ (TARP), which is a key term when assessing the potential application of Australian non-resident capital gains tax. This will be highly relevant to the mining sector and any foreign inbound investors. 

The new Critical Minerals Production Tax Incentive (CMPTI) applies to eligible expenditure from 1 July 2027 to 1 July 2040 and is relevant for companies engaged in processing critical minerals in Australia.

In September 2025, the Australian Department of Treasury proposed an expansion of the types of eligible expenditure. Under the CMPTI, recipients will receive a refundable tax offset of 10% of eligible costs of processing critical minerals in Australia, with a 10-year maximum per project.

The ATO has issued final guidance on the key concepts within the third-party debt test (TPDT) under the new thin capitalisation rules. 

The TPDT broadly allows an entity to deduct all its ‘debt deductions’ attributable to a debt interest that satisfies the ‘third party debt conditions’ and replaces the previous arm’s length debt test. The TPDT was intended to accommodate genuine commercial arrangements relating to Australian business operations, and to balance tax integrity policy intent of the thin capitalisation rules (to prevent base erosion and profit shifting through the use of interest deductions) with the desire to ensure that genuine commercial arrangements were not unduly impeded. Unfortunately, some taxpayers may find that the practical reality of these rules might be somewhat misaligned with this intention.  

Find out more here. 

A bill was introduced into the New Zealand Parliament on 26 August 2025, proposing a suite of tax law changes. Key proposed measures include:

• Setting income tax rates for the 2025–26 tax year.
• The creation of a new foreign investment fund (FIF) income method aimed at easing compliance for new migrants (Revenue Account Method).
• Changes to GST rules for joint ventures which will clarify compliance for oil and gas joint ventures.
• A deferral regime for employee share scheme (ESS) taxation for unlisted companies.
• A tax exemption for income from sale of excess residential electricity.
• Rules to allow non-resident visitors to undertake remote work without triggering NZ tax consequences.
• Information sharing improvements for Inland Revenue, including with NZ Police under certain agreements. 

As at late 2025 the proposed laws had not passed the Parliament. 

On August 18, the Chile Government submitted to the Chamber of Deputies a new Bill (Message No. 167-373) that “establishes tax incentives for the production of green hydrogen and its derivatives.” 

This initiative aims to strengthen Chile’s National Green Hydrogen Strategy, launched in November 2020, with the goal of positioning the country as a global leader in the production and export of this fuel. Specifically, the initiative includes two main components:

1. a tax benefit in the form of a credit against the First Category Tax. In general terms, the bill creates a temporary tax benefit consisting of a credit against the First Category Tax. This credit will be available to companies that purchase green hydrogen or its derivatives—such as ammonia or methanol—from local producers between 2025 and 2023, for a total amount of up to USD $2.8 billion, and 
2. a special tax framework for green hydrogen (H2V) producers located in the Region of Magallanes and the Chilean Antarctic, aiming to equalize the tax treatment of projects carried out in the region. The bill proposes that producers in these regions will be exempt from the First Category Tax, will not have access to additional bonuses for production or sales, will be entitled to request VAT exemption on the import of capital goods and will be eligible to apply for and receive the temporary tax benefit established in this bill. 

The bill has been approved by the House of Representative and is currently in the Senate being analyzed by the finance committee.

A new president was elected last December 14 and will assume in March 2026. The new president has announced a tax reform that would reduce the corporate tax rate from 27% to 23% by 2029.

Please refer to here for more information. 

2025-2029 Budget Law 20,446 was enacted on 16 December 2025. The Law includes a DMTT effective for fiscal years ending on or after 16 December 2025. The new tax is expected to be a QDMTT (i.e., meet the “Qualified” status, once evaluated by the OECD Monitoring Centre) as it has been fully structured following the GloBE (Model) Rules standards. A comprehensive regulation decree is pending, expected to be issued by the Ministry of Finance later in 2026, regulating tax provisions included in Law 20,446.

This new tax is structured as a minimum taxation mechanism, aiming to ensure that income earned in Uruguay by entities that are part of large multinational groups (with consolidated revenues exceeding EUR 750 million) is subject to an effective tax rate of at least 15%.

The QDMTT will coexist with Uruguay’s current tax incentives, but it may result in an additional tax burden when those incentives lead to an effective tax rate below 15%. This includes investment promotion regimes and exempt activities, as long as the income generated falls within the scope of the new tax. Therefore, it is expected that the QDMTT will neutralize the benefits granted under Uruguay’s tax incentive schemes (for in-scope multinational groups).

Please refer to the PwC Pillar 2 Country Tracker for more information. 

The MLI has become applicable since 1 January 2026, affecting the entire DTT network. 

A draft bill was sent to the Congress together with the annual budget 2026 covering, among others, the following aspects:

• Major labor law reform aiming at reducing labor costs and certain employment taxes.

Promotional regime for medium-size investments (RIMI, by its Spanish acronym): a sort of expansion of the RIGI, which available for investments exceeding US$ 200MM and limited to certain industries, the RIMI aims at covering any productive investments (generally defined as acquisition, construction, importation of amortizable movable assets – except automobiles – and civil works) made by Argentine entities set up within the two years following the enactment of the law if passed. 

• Benefits are shorter than in RIGI limited to accelerated depreciation for income tax purposes and to speed-up the VAT recovery process for those balances in favor caused by the investments made 
• Reduction of VAT rate from 21% to 10.5% for electricity provision to the agro-industrial sector used for watering systems / equipment

Regarding income tax, among others:

• Ability to update tax NOLs since 2025
• Relief from direct and indirect capital gains taxation derived from the transfer of securities (other than digital currencies) for local individuals and foreign beneficiaries
• CIT reduction in highest tranches moving the progressive scale for FYs starting on or after 1.1.26 from current 25% / 30% / 35% to 25% / 27% / 31.5% 

Generally, Ecuadorian withholding tax applies at a flat tax rate of 10% (non residents), 12% (Ecuadorian residents) or 14% (non-disclosure of ownership structure) over distributed amount, as well as prepayments of tax over undistributed profits, with rates that vary from 0.75% to 2.5%.

Where applicable, tax prepayments may be considered as tax credits to be applied to future dividend distribution or capital increase, to be used within two years.

• Peru completed its ratification of the OECD Multilateral Instrument (MLI) in May 2025 through the Supreme Decree No. 013-2025-RE and formally deposited the instrument with the OECD on June 9th, 2025. The MLI will enter into force for Peru on 1 October 2025 and apply to withholding taxes as from 1 January 2026. The MLI will modify Peru’s treaties with Canada, Chile, Korea, Mexico and Portugal by incorporating BEPS minimum standards, including the principal purpose test (PPT) and strengthened treaty-abuse provisions.
• Peru has signed and ratified the new Double Taxation Agreement with and the United Kingdom, based largely on the OECD Model Convention (2017). The treaty includes reduced withholding tax rates, and a treaty anti-abuse rule (PPT). The treaty will be in force since January 21st, 2026, and applicable since January 1st, 2027. 
• The Peruvian Supreme Court confirmed that exploration activities can be of three types: (i) basic exploration development; (ii) advanced exploration and feasibility, which includes all feasibility studies up to the final production decision; and (iii) exploration around existing deposits.
  
  To carry out mining exploration activities, it is a legal obligation for the holder of the mining activity to have an environmental impact study; otherwise, they will be sanctioned. Likewise, exploration activities are not incompatible with conducting environmental impact studies and feasibility studies. Therefore, the disbursements incurred to carry out such studies qualify as exploration expenses. (Casación No. 16999-2024 Lima)
• In a debatable decision, the Supreme Court held that since changes to annual tax regulations generally take effect at the start of the next fiscal year, in the case of a tax stability agreement expiring mid-year (e.g., September 2007), its effects should extend until the end of that fiscal year. (Casación No. 16545-2024 Lima)
• The regulatory contribution payable to OSINERGMIN by entities in the electricity and hydrocarbons sectors was set as follows: for the electricity sector, the applicable rate is 0.41% for fiscal year 2026, 0.38% for fiscal year 2027, and 0.35% for fiscal year 2028; for hydrocarbons activities related to the importation and/or production of fuels, including liquefied petroleum gas and natural gas, the rate is 0.38% for fiscal year 2026, 0.37% for fiscal year 2027, and 0.35% for fiscal year 2028; and for hydrocarbons activities involving the transportation of hydrocarbons through pipelines and the distribution of natural gas through pipeline networks, the rate is 0.52% for fiscal year 2026, 0.50% for fiscal year 2027, and 0.49% for fiscal year 2028. 
• The regulatory contribution to OSINERGMIN applicable to the mining sector was set at 0.11% for fiscal year 2026 and 0.10% for fiscal years 2027 and 2028. 
• The regulatory contribution to OEFA for the mining sector was set at 0.07% for fiscal year 2026 and 0.06% for fiscal years 2027 and 2028. 
• The OEFA regulatory contribution applicable to the energy sector was set as follows: for the electricity segment, 0.12% for fiscal year 2026, 0.11% for fiscal year 2027, and 0.10% for fiscal year 2028; for hydrocarbons activities related to the importation and/or production of fuels, including liquefied petroleum gas and natural gas, 0.15% for fiscal year 2026, 0.14% for fiscal year 2027, and 0.13% for fiscal year 2028; and for hydrocarbons activities involving the transportation of hydrocarbons through pipelines and the distribution of natural gas through pipeline networks, 0.14% for fiscal year 2026, 0.12% for fiscal year 2027, and 0.11% for fiscal year 2028.

The Colombian High Tax Court has issued a ruling on the deductibility of VAT in the O&G industry, addressing whether VAT paid on certain acquisitions can be treated as deductible tax. The case involved a dispute between a hydrocarbon company and the tax authority (DIAN) over VAT declared on the purchase of a downhole tool installed in an oil well and a consulting service for a sustainability report.

The Court concluded that the downhole equipment qualifies as a fixed asset for tax purposes, not as a deferred charge. This classification is based on its economic function and intended use in income-generating activities, rather than its accounting treatment. Consequently, under Article 491 of the Colombian Tax Code, VAT paid on the acquisition of fixed assets is not deductible. Instead, the tax must be capitalized as part of the asset cost and recovered through depreciation for income tax purposes.

The ruling reinforces the principle of economic reality over accounting form, emphasizing that the inability to reuse the equipment or its limited useful life does not alter its status as a fixed asset. The Court also clarified that depreciable assets cannot be recorded as deferred charges under Colombian accounting rules.

This decision is particularly relevant for companies in the O&G, as it confirms that tangible, depreciable assets permanently incorporated into production processes fall under the VAT non-deductibility rule. Businesses should review their tax planning and asset classification strategies to ensure compliance.