Global EUR Tax update

Global energy, utilities and resources tax update – January to June 2026

Deep sea mining
  • Insight
  • 20 minute read
  • October 07, 2026

Explore global EU&R tax developments from January to June 2026, with insight into changes in the tax environment, reform trends and regulatory measures. 


The takeaways

  • The first half of 2026 saw broad based tax reform across several regions. These reforms introduced or extended a range of tax incentives, progressed the implementation of Pillar 2 in a number of jurisdictions and continued the deployment of various sustainability measures.

  • The evolving tax and regulatory landscape continues to be influential on the business case for energy, utilities and resource sector growth.  

Introduction

In our Global Energy, Utilities and Resources (EU&R) Tax Update for January to June 2026, we highlight a selection of relevant global tax and regulatory changes. Some key highlights include: ​

  • Africa – South Africa saw a strengthening of carbon pricing measures and additional measures to support VAT and customs compliance.
  • Europe – The EU Omnibus package proposed a mandatory increase of the EBITDA threshold for interest deductibility across the EU and the UK reformed its capital allowance and foreign branch regime. 
  • Middle East – Many jurisdictions progressed the implementation of their local Pillar Two regime, as well as targeted reforms to VAT and certain concessions. 
  • North America – Various changes to the tariff and trade landscape across the region, accompanied by regulatory reform aimed at enabling the EUR sector. 
  • Asia Pacific – Australia introduced changes to its foreign resident capital gains tax regime, directly impacting the sector.
  • South America – Substantial reforms are underway in Chile, Peru and Venezuela with respect to income taxes and transfer pricing. 

Please contact me or another member of the PwC Global Energy, Utilities and Resources team if you would like to discuss the matters covered in this update.

James O'Reilly

Global EU&R Tax Leader, PwC Australia

+61 7 3257 8057

Email

Africa

PwC EU&R Tax – Africa contacts

1. Laetitia le Roux (ZA)

2. Chijioke Uwaegbute (NG)

3. Dzidzedze Fiadjoe (GH)

 

1. South Africa Diesel refund - system update

The Diesel Refund System is being modernised by creating a dedicated digital platform for qualifying users and sellers to register and claim diesel refunds under Schedule 6 of the Customs and Excise Act. Key changes include the separation of diesel refunds from VAT as a standalone process, mandatory registration of sellers to enhance supply chain traceability, real-time online claim tracking, and automated validations designed to minimise errors and reduce processing delays. A closed-group pilot commenced in January 2026, with full registration originally planned for April 2026. However, the registration launch has been delayed to allow additional piloting and testing to ensure the system is stable, secure, and functional.

2. South Africa VAT – Domestic Reverse Charge on gold South Africa's Domestic Reverse Charge Regulations for valuable metals, effective since July 2022, currently exclude supplies where gold content is below 1% of gross weight. Draft amendments published on 2 June 2026 propose to limit this exclusion to certain industries, notably the exclusion of mining. If enacted, primary gold and platinum miners will fall within the DRC framework. This means the purchaser rather than the seller must account and declare the VAT on valuable metal transactions in the VAT201 return. Certain supplies, including those to the South African Reserve Bank and registered banks, remain excluded. However, a proposal has been issued whereby the zero-rating of the sale of gold to the SARB and registered banks will potentially be removed, allowing these transactions to be included in the DRC mechanism. 
3. South Africa South Africa – Legislative Developments – Various items
  • The Taxation Laws Amendment Act 5 of 2026 and the Rates and Monetary Amounts and Amendment of Revenue Laws Act 3 of 2026, both published in the Government Gazette on 1 April 2026, introduced significant amendments to South Africa’s carbon tax regime. The carbon tax rate for the 2026 tax period is R308/tCO₂e (~EUR 15), continuing the legislated escalation pathway to R462/tCO₂e (~EUR 25) by 2030.
  • The renewable energy premium deduction for electricity generators purchasing renewable electricity under power purchase agreements has been extended from 31 December 2025 to 31 December 2030, preserving electricity price neutrality. Electricity generators remain subject to a minimum effective carbon tax of R0.035/kWh (3.5 cents per kWh). This extension matters for EU&R electricity generators looking to manage carbon costs whilst transitioning to renewable energy sources. The petrol and diesel carbon tax component has also increased from 0.69 cents to 0.99 cents per litre (effective 1 January 2025), affecting fuel costs for mining, transport and logistics operations.
  • Amendments integrating the carbon tax with the mandatory carbon budget system under the Climate Change Act, 2024 have been enacted but await proclamation by the Minister of Finance. Once in force, a penalty rate of R640/tCO₂e (approximately EUR 33) will apply to Scope 1 emissions exceeding a taxpayer’s allocated carbon budget, with no allowances permitted for above-budget emissions. EU&R companies with significant Scope 1 emissions from power generation, refining, mining operations and industrial processes should assess their carbon budget allocations and develop emissions reduction strategies to avoid the penalty rate.
  • A refund mechanism allows taxpayers to recover carbon tax paid at the penalty rate over the five-year carbon budget cycle, provided cumulative emissions remain within budget from the third tax period onwards.
  • The 5% carbon budget allowance for taxpayers participating in the carbon budget system has been extended to 31 December 2026.
  • From 1 January 2026, offset allowances have increased across various activities. Fuel combustion activities now qualify for 15% (up from 10%), whilst fugitive emissions, CO₂ transport and storage, mineral industry and chemical industry activities now qualify for 10% (up from 5%). These increased allowances are particularly relevant for mining companies, oil and gas operators, and chemical and petrochemical producers.
  • Technical amendments have updated emission factors and net calorific values for methane-rich gas, natural gas, sub-bituminous coal and other bituminous coal, effective from 1 January 2026. Oil and gas operators, coal-fired power generators and mining companies using these fuels for energy should review their carbon tax calculations to reflect these changes.
4. South Africa South Africa – Customs Legislative Developments
  • The Tax Administration Laws Amendment Act 4 of 2026 has inserted a new Chapter XB into the Customs and Excise Act, 1964, establishing a Voluntary Disclosure Relief (VDR) programme for customs and excise matters. The VDR programme allows persons who have underpaid customs duties, excise duties, environmental levies, health promotion levies, air passenger tax or import VAT to voluntarily disclose the underpayment and obtain relief from criminal prosecution, administrative penalties (excluding late payment penalties) and forfeiture amounts. 
  • To qualify, the disclosure must be voluntary (that is, not made after notification of an audit or enforcement action), full and complete in all material respects, and must not result in SARS being obliged to pay a refund. 
  • The Commissioner will assess the duty and interest owing based on the disclosed facts, and a voluntary disclosure agreement will be concluded. The VDR programme is particularly relevant for EU&R importers of equipment and commodities, as well as companies subject to environmental levies on fuel products. 
  • Importantly, as at the time of this article this Chapter is not yet operational. It comes into effect on a date to be determined by the Minister by notice in the Government Gazette, and the Commissioner’s rules prescribing the application forms, requirements and procedures have not yet been published.
5. South Africa Diamond export levy A 5% levy now applies to unpolished diamonds exported from South Africa but does not apply where producers meet certain local sales targets. Different thresholds are applied to producers of different sizes. Budget 2026 proposed to lower the size threshold for large producers from R3 billion to R2 billion, while giving large producers a choice between selling 15% locally and offering the balance through the Diamond Exchange and Export Centre (DEEC), or selling 40% locally with no DEEC offering requirement.

Europe

PwC EU&R Tax – Europe contacts

1. The Netherlands EU Tax Omnibus Directive Proposal

On 24 June 2026, the European Commission published its Tax Omnibus Directive proposal, amending six EU direct tax directives to simplify compliance and strengthen competitiveness. Several changes are particularly relevant for capital-intensive industries such as EU&R.

The proposed mandatory increase of the EBITDA threshold for interest deductibility from as low as 24.5% (as currently applies in the Netherlands) to 30%, combined with a mandatory exclusion for low-risk third-party loans used to finance a taxpayer's own operations, could materially improve the deductibility of financing costs for highly leveraged energy and infrastructure groups. A mandatory group escape rule further supports entities whose leverage is in line with that of its group and reflects legitimate sector-level capital needs. Additionally, a new counter-cyclical derogation allows full interest deduction when EBITDA drops by at least 50%, offering relief during downturns common in commodity-driven sectors.

The broadened scope of the optional exclusion for long-term public infrastructure projects now extends to climate, energy security, and digitalisation initiatives, directly benefiting utilities and renewable energy developers. Furthermore, the proposed new EU-wide R&D allowance for tangible assets, such as plant, machinery, and equipment used for R&D, may benefit resource companies investing in energy transition technologies.

As at the time of this article, the proposal still requires unanimous approval by the Council of the EU, and the final text may differ materially from the Commission's proposal following political negotiations among Member States.
For more information on the Omnibus proposal here.

2. United Kingdom Energy windfall taxes

Energy Profits Levy (“EPL”)

The 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.

Electricity Generator Levy (“EGL”)

The UK's EGL, the 'temporary' 'windfall tax' on certain electricity generators, has been in effect since 1 January 2023, with the 45% levy coming to a close on 31 March 2028.  In April 2026, the UK government announced an increase in the rate of the EGL from 45% to 55% from 1 July 2026. Furthermore, the EGL will now be extended past its scheduled conclusion in 2028, though the UK government has not provided any further detail regarding when it could be extended to.

3. United Kingdom Branches / Permanent Establishments

UK Foreign Branch Exemption

The branch exemption regime will become mandatory for UK companies with overseas branches for accounting periods beginning on or after 1 January 2027, broadly exempting from UK corporation tax the profits and losses arising in non-UK branches of UK companies. For oil and gas exploration and exploitation businesses in the UK, the mandatory branch exemption regime would take effect from 1 September 2026 with a deemed accounting period end on 31 August 2026.

While this should not impact companies that have already elected into the regime, for companies with loss-making overseas branches, these losses may no longer be available for offset against UK profits. Furthermore, the mandatory application of the branch exemption regime potentially impacts a wider range of other areas of UK tax including patent box, R&D, corporate interest restriction ("CIR"), anti-hybrids, transfer pricing, Pillar Two and Double Taxation Treaty ("DTT") relief claims.

Permanent Establishment reform

Effective 1 January 2026, the UK's permanent establishment ("PE") legislation has had updates including:

  • The domestic definition of a PE now aligning with Article 5 of the OECD Model.

  • Diverted Profits Tax ("DPT"), taxing profits at 31% arising from contrived arrangements to avoid a UK PE, being repealed and replaced with a new corporation tax charging provision for unassessed transfer pricing profits ("UTPP"). UTPP is also charged at 6 percentage points above the main rate of UK corporation tax (31%), though companies can access Double Taxation Treaties and Mutual Agreement Procedures ("MAPs") to eliminate double taxation.

4. United Kingdom Capital expenditure – Gunfleet Sands case

Gunfleet Sands – Supreme Court decision on scope of entitlement to capital allowances.

On 15 April 2026, the UK Supreme Court delivered its long-awaited judgment in Orsted West of Duddon Sands (UK) Ltd & others v HMRC [2026] UKSC 12, commonly referred to as the Gunfleet Sands case. The decision provides important clarification on the scope of capital allowances, particularly in relation to pre-construction and development expenditure.

The Gunfleet Sands case concerned site-specific design work and surveys necessary for the construction of several offshore wind farms. Allowing HMRC's appeal, the Supreme Court determined that the costs were not in fact expenditure on the provision of the wind farms, and so the taxpayer was not entitled to capital allowances on them.  In making this decision, the Supreme Court considered that the 'limiting curve' for qualifying expenditure is around the plant and the provision of it. Consequently, the costs of carrying out studies and surveys which provide taxpayers with advice about how to choose or design plant fall outside the limiting curve.

This decision emphasises the narrow scope of capital allowances qualifying expenditure, and that the accounting classification of costs as part of an asset does not necessarily mean the same approach will apply for capital allowances. The implications likely extend well beyond offshore wind and the energy sector. Any business undertaking large-scale capital projects – including infrastructure, real estate and manufacturing – may be affected.

Moving forward, businesses will need to consider the impact of this decision on capital allowances claims and can expect HMRC challenges on claims for the cost of surveys, feasibility assessments and other advisory inputs. More broadly, this decision emphasising a narrow entitlement to capital allowances may influence investment behaviour in capital-intensive sectors.

5. United Kingdom Capital expenditure

From April 2026, the main rate writing-down allowance for plant and machinery falls from 18% to 14%. A new 40% first-year allowance applies to qualifying main-rate expenditure from January 2026. The 100% first-year allowance for zero-emission cars and EV charge points is extended to March/April 2027.

Broadly, capital expenditure on several types of plant and machinery continue to benefit from 100% allowances, including on most oil and gas plant and machinery.

6. United Kingdom Accounting updates

UK Financial Reporting Standard ("FRS") 102

FRS 102 is the primary accounting standard applicable in the UK in the absence of IFRS or other standards. Given the starting point for tax treatment in the UK often follows the accounts, the following 2026 amendments may be relevant to groups using the FRS 102 GAAP:

  1. Revenue recognition - This amendment aligns to the current 5-step methods for revenue recognition under IFRS 15. The main impact is likely to be on entities with bundled contracts, milestone payments, variable consideration, licences, long-term service arrangements, construction-type contracts, or multiple deliverables. 
  2. Lease accounting - Elimination of the operating/finance lease distinction for lessees, with both accounted for under the same model with a right-of-use asset and corresponding liability. Depreciation and interest expense will replace straight-line operating lease expense. This aligns to the current treatment for lease accounting under IFRS.
  3. Accounting for uncertain tax positions - The update should lead to more structured consideration of whether it is probable that the tax authority will accept the treatment of an uncertain tax position in the tax computation.

Updates to Companies House

On 9 June 2026, the government confirmed that Economic Crime and Corporate Transparency Act ("ECCTA") accounts reforms will be postponed by one year from April 2027 to April 2028. The reforms include several updates to Companies House, including the removal of options for small companies to file abridged accounts and the reduction of the number of times a company can shorten its accounting reference period.  The government also confirmed that all UK-registered companies will be required to file accounts in iXBRL format using commercial software from April 2028.

Middle East

PwC EU&R Tax – Middle East contact

1. Qatar Qatar – Pillar Two / Global and Domestic Minimum Tax rules Qatar’s Global and Domestic Minimum Tax framework is governed by Law No. 22 of 2024 and Council of Ministers Resolution No. 2 of 2026. The framework introduces the Income Inclusion Rule and Domestic Minimum Top-up Tax for fiscal years beginning on or after 1 January 2025. In-scope energy and utilities groups should assess Qatar constituent entities, ETR, safe harbours, data availability, and compliance obligations
3. Qatar Qatar – Trusted Entity regime for withholding tax treaty relief Council of Ministers Decision No. 4 of 2026, published on 15 March 2026 and effective from 16 March 2026, introduced a “Trusted Entity” regime. Approved Qatar taxpayers may directly apply reduced withholding tax rates or exemptions under applicable double tax treaties when making payments to non-residents, instead of applying the traditional pay-and-refund approach. This is relevant for EUR businesses making cross-border service, royalty, interest, or other WHT-sensitive payments.
4. Qatar Capital Gains Tax Relief for Corporate Restructuring The General Tax Authority has introduced a new tax relief measure that provides a capital gains tax exemption for eligible corporate restructuring transactions, including qualifying mergers, intra-group asset transfers, and business reorganisations. This update is intended to reduce the tax burden associated with restructuring activities, enabling businesses to optimize their operations and support long-term growth more efficiently.
5. Qatar Enhanced Access to Double Tax Treaty Benefits A new direct application mechanism for Double Taxation Avoidance Agreements (DTAAs) allows eligible taxpayers to claim treaty benefits before withholding tax is applied, rather than through the traditional refund process. This enhancement streamlines tax compliance, improves cash flow by reducing processing times, and facilitates cross-border transactions for businesses operating in Qatar.
6. KSA Extension of tax amnesty Effective 1 January 2026, the Ministry of Finance, upon ZATCA's recommendation, extended the Cancellation of Fines and Exemption of Financial Penalties Initiative until 30 June 2026. Subsequently, on 29 June 2026, the initiative was further extended for an additional six months and will now remain in effect until 31 December 2026, which will cover all taxes due by 30 June 2026.
7. KSA Transfer pricing / APA programme During the period, KSA continued developing its Advance Pricing Arrangement framework, relevant for taxpayers seeking certainty on related-party transactions and transfer pricing positions.
8. KSA Developments in Special Economic Zones (SEZs)

On 16 February 2026, the Zakat, Tax and Customs Authority (ZATCA) published the draft Economic Substance Requirements Regulations of Special Economic Zones. The draft regulations set out the economic substance requirements applicable to the four special economic zones (SEZs) of King Abdullah Economic City (KAEC), Ras Al-Khair (RAK), Jazan, and Cloud Computing.

The regulatory framework governing the tax incentives for Saudi Arabia's Special Economic Zones (SEZs) continued to develop during 2026. In addition, draft Economic Substance Regulations were released for public consultation, outlining the substance requirements that businesses must satisfy to benefit from the available tax incentives

9. KSA Continued Implementation of Phase 2 of E-Invoicing

ZATCA continued rolling out Phase 2 (Integration Phase) of the e-invoicing initiative by onboarding additional groups of taxpayers according to the previously announced implementation schedule, requiring eligible businesses to integrate their invoicing systems with ZATCA.

10. UAE UAE – Amendments to Tax Procedures Law -Effective from 1 January 2026 The UAE Ministry of Finance confirmed that amendments to the Tax Procedures Law took effect from 1 January 2026. The amendments aim to improve tax administration, transparency, refund processes, and procedural efficiency. Key changes include introducing a five-year time limit for claiming tax refunds or utilizing tax credits, granting the Federal Tax Authority (FTA) broader audit and inspection powers, simplifying procedures for correcting tax errors, and updating the statute of limitations for tax claims. EUR businesses should review the impact on voluntary disclosures, refund claims, assessment limitation periods, and audit readiness.
11. UAE VAT Law Amendments – Effective 1 January 2026 The UAE has introduced key amendments to the VAT Law under Federal Decree-Law No. (16) of 2025, effective 1 January 2026, including the removal of the self-invoicing requirement for certain Reverse Charge Mechanism (RCM) transactions, clearer rules for input VAT recovery and VAT refunds, and restrictions on recovering input VAT for transactions linked to tax evasion where the taxpayer knew, or should have known, of the non-compliance.
12. UAE Tax Clarifications and Directives The UAE Federal Tax Authority (FTA) issued Decision No. 2 of 2026, effective 1 March 2026, updating its policy on the issuance of tax clarifications and directives. The decision introduces a more structured and transparent framework governing private and public tax clarifications, administrative exceptions, VAT input tax apportionment requests, Advance Pricing Agreements (APAs), and binding tax transaction directives. It also establishes clearer eligibility criteria, application procedures, response timelines, and circumstances under which the FTA may accept, reject, amend, or withdraw a clarification or directive, which may improve tax certainty and provide greater transparency and consistency for taxpayers.
13. UAE UAE Tax Procedures Executive Regulation Amendments Effective 1 April 2026, the UAE amended the Executive Regulation of the Tax Procedures Law to enhance tax administration and procedural certainty. Key updates include revised Voluntary Disclosure requirements by introducing a AED 10,000 materiality threshold, streamlined tax refund procedures, additional record retention requirements in specific cases (e.g., tax audits, disputes, and refund claims), and enhanced procedural rules governing tax audits, credit balance refunds, and the disclosure of taxpayer information. These amendments aim to strengthen compliance while providing greater clarity and efficiency in tax administration.
14. UAE E-Invoicing Implementation Roadmap The UAE Ministry of Finance updated the implementation timeline for the Electronic Invoicing (E-Invoicing) System, introducing a phased mandatory rollout based on taxpayers' annual revenue. The pilot programme and voluntary implementation commence on 1 July 2026, while mandatory implementation begins from 1 January 2027 for businesses with annual revenue of AED 50 million or more, followed by businesses below this threshold from 1 July 2027, and government entities from 1 October 2027. The decision also confirms that Business-to-Consumer (B2C) transactions are currently excluded from the scope of the E-Invoicing System until further notice.
15. UAE Taxation of Family Foundations Corporate Tax Guide

The Federal Tax Authority (“FTA”) has released the June 2026 update to its Corporate Tax (CT) Guide on the Taxation of Family Foundations, reference CTGFF1. The updated guide builds on, and replaces, the first version issued in May 2025.

The update provides further clarifications and new guidance on several important topics, including the treatment of trusts, similar entities, multi-tier structures, transfers to Family Foundations, juridical persons acquired or sold, and family offices. These clarifications reinforce the importance of reviewing existing and planned family wealth structures through a Corporate Tax lens. They also create an opportunity for families to assess whether their structures remain fit for purpose, aligned with the FTA’s latest guidance, and positioned to support long-term governance and succession objectives. 

16. UAE R&D tax credit

On 18 March 2026, the Ministry of Finance ("MoF") published Cabinet Decision No. 215 of 2025 ("CD 215") and Ministerial Decision No. 24 of 2026 ("MD 24") introducing an "R&D Tax Credit framework" for the purposes of UAE Corporate Tax Law ("CT Law") and the imposition of Top-up Tax on MNEs (“Pillar 2"). The decisions are effective for Tax Periods or Fiscal Years commencing on or after 1 January 2026.  This development marks a significant step towards advancing the UAE's strategic objective of positioning itself as a global hub for advanced industries and emerging technologies. 

The MoF has described the current framework as 'Phase 1', signalling potential enhancements including in the form of refundable tax credits and/or expanding the level of Qualifying R&D Expenditure in Phase 2 based on insights gathered from Phase 1.

17. Kuwait Voluntary Advance Tax Payment Mechanism applicable to MNE Groups

The Kuwait Ministry of Finance (“MoF”) issued Circular No. 1 of 2026 dated 29 April 2026, introducing a voluntary advance tax payment mechanism applicable to Multinational Enterprise (MNE) Groups subject to the Tax Law on MNE Groups (Decree Law No. 157 of 2024). The Circular establishes a voluntary mechanism enabling eligible taxpayers to make advance payments toward their estimated tax liabilities through the submission of a provisional tax statement, ahead of the statutory deadline for filing the tax declaration.

The mechanism is introduced under the framework of the Tax Law on MNE Groups and the Executive Regulation issued under Ministerial Resolution No. 55 of 2025, reflecting a continued effort by the Kuwait tax authorities to enhance tax administration and encourage early engagement by in-scope taxpayers.

18. Kuwait Kuwait MoF Budget Executive Rules (FY 2026/27)

The Kuwait Ministry of Finance has issued the State Budget Implementation Rules for FY2026/27, providing important guidance on the interaction between the 5% tax retention regime and the Domestic Minimum Top-Up Tax (DMTT). The rules reaffirm that the 5% tax retention requirement continues to apply under the existing Corporate Income Tax framework, while exempting DMTT-registered multinational entities holding a valid DMTT tax card from the retention requirement. They also introduce a five-year limit for unclaimed retained amounts, after which they will be transferred to the Ministry of Finance, require tax clearance certificates for certain government transactions, and stipulates that contracts with government entities must not include provisions under which the government bears income tax liabilities on behalf of the counterparty or grants any form of tax exemption. 

Further guidance from the Kuwait Tax Authority is expected to clarify the implementation and broader application of these changes.

19. Kuwait Kuwait Granted QDMTT Safe Harbour Status The OECD has officially recognized Kuwait's Domestic Minimum Top-up Tax (DMTT) as a Qualified Domestic Minimum Top-up Tax (QDMTT), effective 1 January 2025. This recognition enables the QDMTT Safe Harbour, allowing eligible multinational enterprise (MNE) groups to generally treat additional foreign top-up tax under the Income Inclusion Rule (IIR) and Undertaxed Profits Rule (UTPR) as nil for their Kuwait operations, subject to meeting the Safe Harbour conditions. The update is expected to reduce global compliance burdens, provide greater certainty in tax provisioning, and may require affected MNE groups to reassess any FY2025 IIR/UTPR tax provisions.
20. Kuwait Kuwait Ratifies the OECD BEPS Multilateral Instrument Kuwait has officially ratified the OECD BEPS Multilateral Instrument (MLI) through Decree-Law No. 62 of 2026, marking a significant step in aligning its tax treaty framework with international standards. Once the ratification instrument is deposited with the OECD and the MLI enters into force, it will modify Kuwait's covered tax treaties by introducing enhanced anti-abuse measures, including the Principal Purpose Test (PPT), strengthening treaty compliance, and reducing opportunities for treaty shopping. Businesses with Kuwait-related cross-border structures should assess the impact on their treaty positions and monitor the effective date of the MLI's application.
21. Kuwait Kuwait signs 2 OECD agreements to strengthen international tax transparency Kuwait signed two OECD Inclusive Framework agreements to strengthen international tax transparency and cross-border cooperation under the BEPS framework. The CbCR MCAA enables automatic exchange of country-by-country reports between tax authorities, while the CRS MCAA 2.0 Addendum expands reporting requirements to cover certain e-money products, central bank digital currencies and indirect crypto investments. Further domestic legislation and regulatory guidance are expected to implement these agreements, reflecting Kuwait’s continued commitment to international tax cooperation.

North America

PwC EU&R Tax – North America contacts

1. USA Calendar year SEC filers reported their income tax disclosures under ASU 2023-09 Many companies significantly increased the disclosures in their financial statement tax footnotes as a result of adopting the new ASU. The expanded footnote required eight categories of rate reconciling items in the effective tax rate table, including more detail for material jurisdictions. Income taxes paid for significant jurisdictions is also required. Multinational companies generally adopted the ASU on a prospective basis, whereas US domestic companies generally applied the guidance on a retrospective basis. Some takeaways involved applying materiality to the tax footnote, in addition to the prescribed thresholds, and standardizing data collection across jurisdictions for comparability. 
2. USA The US Treasury department issued Notice 2026-7 related to the Corporate Alternative Minimum Tax, with taxpayer favourable guidance. The Notice addressed several taxpayer questions, such as how to address repairs and maintenance expenses where tax differs from book treatment, and pre-OBBBA research and experimentation costs. In these cases, the Notice indicates that companies may follow the same treatment of these items for CAMT as for regular tax – in other words no additional CAMT liability is potentially created. Some questions still remain related to CAMT, such as how to handle partnership income, treatment of certain M&A transactions, and how to track CAMT tax basis apart from regular tax basis.
3. USA The Supreme Court invalidated the use of IEEPA (Emergency Powers Act) to impose tariffs on imported goods Many companies are in the process of pursuing refunds related to the IEEPA tariffs with moderate success. While IEEPA has been invalidated, the US Executive Branch continues to impose tariffs under separate articles, such as Section 122 for broad global tariffs and Section 232 for industry-specific tariffs. Congress is also considering various measures related to tariffs as a legislative matter.
4. CA Federal support for low-carbon LNG and CCUS investment

Previously proposed low‑carbon LNG measures now have implementation details: 

Certified facilities - generally LNG facilities certified by the Minister of Energy and Natural Resources based on a third-party engineering report and an expected emissions intensity of no more than 0.20 tonnes of CO2e per tonne of LNG - may access accelerated CCA rates of 50% for eligible liquefaction equipment and 10% for eligible related non-residential buildings. 

CCUS ITC eligibility is also expanded to enhanced oil recovery at reduced rates: 30% for direct air capture equipment, 25% for other capture equipment and 18.75% for transportation, storage and use equipment for 2026 2035, with those rates halved for 2036 2040. 

Find out more information here. 

5. CA Bill C-31 expands Canada’s Pillar Two framework and safe harbours Bill C-31 proposes amendments to Canada’s Pillar Two framework: the UTPR is deferred by one year and will apply to in scope MNE groups for fiscal years beginning after December 30, 2025; the transitional CbCR safe harbour is extended by one year, to fiscal periods beginning before January 1, 2028, and ending before July 1, 2029; and the new side by side safe harbour is introduced. The US is currently the only jurisdiction with a qualified side by side regime. Find out more information here. 
6. CA 2025 Budget – note the TP modernization and SR&ED enhancements

Previously proposed 2025 Budget measures now enacted in Bill C-15 include: 

  • modernized transfer pricing rules: significantly changing analysis and documentation for taxation years starting after November 4, 2025

  • a two-year extension of the mineral exploration tax credit

  • expanded critical mineral exploration tax credit eligibility for certain flow through share agreements

  • SR&ED enhancements (expanded refundability for eligible public companies and higher expenditure limit for qualifying CCPCs, plus restored eligibility for capital expenditures), and 

  • clean economy ITC changes

Other measures, such as immediate expensing for M&P buildings, related Canadian exploration expense changes, and certain provincial incentives, remain proposed or advancing. 

7. CA Trade and tariff developments reshape cross-border supply chains US trade policy remains fluid, and copper exporters are specifically affected because copper is among the sector specific tariff areas that remain outside IEEPA relief. Canadian EUR businesses should map affected imports and exports, preserve refund data, review CUSMA eligibility, model net duty exposure and revisit sourcing, pricing, transfer pricing, and contract protections.
8. CA Canada’s steel derivative goods surtax remission framework Canada’s steel derivative goods surtax remission framework may reduce costs for eligible imports. Importers need eligibility support, CARM coding, and documentation. Find out more information here.
9. MX Decree for the Immediate Authorization of Investments

On May 4, the Mexican Federal Official Gazette published the Decree for the Immediate Authorization of Investments.

The purpose of the Decree is to encourage investment projects that promote economic development, strengthen the competitiveness of key industries, create jobs, and support productive value chains. It establishes an authorization mechanism that allows qualifying projects to be implemented immediately, without bureaucratic costs, while still complying with all applicable legal requirements.

Investment projects may apply for this authorization if they meet any of the following criteria:

  1. They have been approved for development within a designated Development Pole (Polo de Desarrollo), as determined by the Interoceanic Corridor of the Isthmus of Tehuantepec or by the Ministries of Economy or Environment, as applicable.
  2. They involve investments of MXN 2 billion or more.
  3. They belong to strategic sectors recognized under the national legal framework or designated by the Committee, including: 
  • Technological infrastructure
  • Data processing centers
  • Textile and apparel manufacturing
  • Semiconductor and microelectronics design and manufacturing
  • Automotive and auto parts industries
  • Medical devices
  • Pharmaceutical and biopharmaceutical industries
  • Aerospace
  • Energy
  • Chemical industry

Find out more information here.

 

10. MX Flexibility Restored in the security for the tax claim options under Article 141 of Federal Tax Code

On April 9, 2026, the Decree amending Article 141 of the Federal Tax Code (FTC) was published in the Official Gazette of the Federation.

As of January 1, 2026, Article 141 had established both the forms of security and the order of priority that taxpayers were required to follow in securing tax claims whenever any of the circumstances set forth in Article 142 of the FTC applied (for example, suspension of the administrative enforcement procedure through the filing of an administrative appeal or a nullity claim).

In general terms, the amendment restores the catalogue of methods for securing tax claims, as well as the freedom of choice that was in effect through tax year 2025. As a result, taxpayers may once again choose, in a more flexible manner and without a mandatory order of precedence, the type of security that best suits their financial circumstances, including:

  • Cash deposit
  • Letter of credit
  • Pledge
  • Surety bond
  • Third-party guarantee
  • Administrative levy
  • Securities or credit portfolio
11. MX Law for the Promotion of Investment in Strategic Infrastructure for Development

The Law for the Promotion of Investment in Strategic Infrastructure for Development published on April 9, 2026, and its accompanying Regulations establish a special legal framework designed to encourage investment in strategic public infrastructure through coordinated participation of the public, private, and social sectors. It creates mechanisms for the identification, evaluation, structuring, financing, and monitoring of projects that contribute to national development while maintaining fiscal discipline and protecting public finances.

The framework applies broadly to strategic infrastructure projects across sectors such as transportation and logistics, energy, water, healthcare, education, urban infrastructure, telecommunications and connectivity, industrial parks, tourism, environmental projects, and other initiatives that support economic competitiveness and social development. It is intended for projects promoted by federal entities, state and local governments, and other public bodies, while enabling the participation of private investors and social organizations through various investment and financing structures.

In general terms, the Law establishes a structured process under which infrastructure projects are evaluated for technical, legal, economic, financial, and social viability before becoming eligible for support. It introduces instruments such as Special Purpose Vehicles (SPVs), mixed participation schemes, long-term investment contracts, and financing mechanisms that facilitate project development and private-sector involvement. At the same time, the regime incorporates strict safeguards on transparency, risk management, public accountability, budget control, and fiscal sustainability, ensuring that investment promotion does not create implicit government guarantees or uncontrolled public liabilities.
Find out more information here. 

Oceania

PwC EU&R Tax – Oceania contacts

1. Australia Australian Capital Gains Tax 

On 26 June 2026 the Australian Government passed laws to give effect to its 2026-27 Budget capital gains tax (CGT) and housing tax reform measures. Specifically, the legislative package introduces the framework for:

  • The replacement of the 50% CGT discount for individuals and trusts from 1 July 2027 with cost base indexation;

  • Bringing in all pre-CGT assets (including those held by companies) into the CGT regime from 1 July 2027;

  • A new 30% minimum tax on capital gains; and 

  • Restrictions on negative gearing for certain residential dwellings applicable from 1 July 2027.

More information can be found here. 

2. Australia Foreign resident CGT

The Australian Government has passed changes on how foreign residents are taxed on capital gains connected to Australian land and natural resources. The measures form part of the Treasury Laws Amendment (Strengthening Accountability for Tax Adviser Misconduct and Other Measures) Act 2026 (the Act) and represent the most significant overhaul of the foreign resident CGT provisions since Division 855 was introduced in 2006.   

The Act:  

  • introduces a new statutory definition of "real property" to broaden the tax base, capturing assets with a close economic connection to Australian land and natural resources;  

  • amends the principal asset test applicable to indirect Australian real property interests, moving from a single point in time to a 365-day look-back period;  

  • strengthens the foreign resident capital gains withholding (FRCGW) regime for large transactions;  

  • provides a targeted, time-limited 50% CGT discount for certain foreign investors disposing of Australian renewable energy assets; and 

  • seeks to align tax treaties definitions of “real property”, and related concepts to Australian domestic tax definitions.

The Act comes into effect from 1 October 2026 and follows the release of exposure draft legislation on 10 April 2026.  It reflects a number of changes responding to stakeholder feedback. The most significant development is that there is no longer any retrospective application of the expanded definition of "real property" and the 50% CGT discount for certain foreign investors disposing of Australian renewable energy assets has been extended to 30 June 2040.

More information can be found here.

3. Australia Taxation of Discretionary Trusts 

Treasury has released for consultation a package of exposure draft law and explanatory materials that aims to give effect to the Government's 2026-27 Budget announcement that a 30% minimum tax will apply to the income of discretionary trusts. 

The draft law confirms the start date of 1 July 2028 and, importantly, sets out the detail of two ways in which affected trusts can respond - a three-year rollover to restructure out of the discretionary trust, or an election to remain outside of the minimum tax regime by locking in the trust’s nominated beneficiaries and their distribution proportions indefinitely.

The draft law also responds to some concerns raised in response to the July 2026 Treasury consultation paper. A codified definition of fixed trust will replace the existing definition for most income tax purposes and distributions to charities, deductible gift recipients (DGRs) and other income tax exempt entities will be carved out of the minimum tax, and trustees with excess franking credits after paying the minimum tax will be entitled to a refund. However, a corporate beneficiary will still not be entitled to an offset for minimum tax paid by the trustee, so distributing to a company is expected to remain materially more expensive than distributing to an individual (unless the trustee makes the election to nominate it as a beneficiary with a fixed entitlement to the income and capital indefinitely).

Although further tranches of law are expected, trustees and family groups now have enough detail to begin modelling their position and comparing the three practical paths available: restructure under the rollover (or other available rollovers under the tax law), elect into the new excluded trust regime, or accept the minimum tax.

Please refer to further information here. 

South America

PwC EU&R Tax – South America contacts

1. Chile Key tax reforms

Chile’s National Reconstruction and Economic and Social Development Bill has completed congressional approval and Constitutional Court review. The bill introduces a gradual reduction of the corporate income tax rate from 27% to 23% by 2029, together with the gradual restoration of full integration between corporate income tax and final shareholder taxes.  

Of particular relevance to the energy and natural resources sectors, the bill establishes a new tax stability regime for qualifying energy, mining, industrial, infrastructure and other specified investment projects involving at least USD 50 million. The stability period ranges from 10 to 20 years depending on the investment amount, and investors must accept a 1.5 percentage point increase in the corporate income tax rate. The regime generally protects the tax burden and certain rules applicable when the investment agreement is executed, including depreciation, tax losses, VAT and customs duties on imported capital goods. For mining projects, it also covers the mining royalty, mining patents and any new taxes specifically imposed on the activity.  

The Constitutional Court largely upheld the tax stability regime but excluded its application to “related projects” and confirmed that only the project categories expressly listed in the law may qualify.  

As of the date of preparation of this report, enactment and publication of the new law remain pending.

2. Uruguay Investment Promotion Regime

Through Decree No. 329/025, amendments have been introduced to the current Investment Promotion Regime with the aim of accelerating the country's economic growth and further encouraging productive activity and private investment.

As a reminder, the Investment Promotion Regime is organized under Law No. 16,906 and grants tax incentives to taxpayers subject to Corporate Income Tax (CIT) that carry out eligible investments and generate certain positive externalities.

Investment projects must be submitted to the Implementation Committee (COMAP), which assesses their eligibility and issues a recommendation to the Executive Power (EP), responsible for issuing the corresponding resolution declaring the investment project promoted.

Within the framework of the new decree, the objectives of Increment of Employees and Exports, Decentralization, Development and Innovation remain in force. However, the Clean Technologies objective has been eliminated and replaced by a new objective related to Environmental Sustainability.

Particularly, the “Environmental Sustainability” indicator promotes investment related to environmental sustainability production models.  

Namely, the promoted investments are the ones that aimed at improving efficiency in the use of raw materials, water, and energy; the sustainable use of water; and the protection of water resources as well as marine and coastal ecosystems. It also covers the mitigation of greenhouse gas emissions and adaptation to climate change, the reduction of waste generation, and the increase in recycling or valorisation processes. Furthermore, it involves the implementation of Circular Economy and Sustainable Bioeconomy strategies in production and services, the protection and restoration of biodiversity, investments aimed at reducing the use of hazardous chemicals, those that reduce food waste, and promote food security. The considered investments should foster the transformation toward more environmentally sustainable production models.

3. Argentina MLI adoption

The MLI has become applicable since 1 January 2026, affecting the entire DTT network.  A bill was approved by Congress together with the annual budget 2026 covering, among others, the following aspects:  

  • Major labor law reform aimed 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 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. 

  • The Congress approved and the Government passed the amendment of the Glazier Law to revisit the definition the glacial and periglacial areas with the aim of allowing together with the relevant provinces the mining operations in them, where most of the above copper projects would be located. The debate installed with environmental organizations has been the use of hydric resources.  

  • After 20 years the province of Mendoza has approved a copper project committing itself with the exhaustive control of the use of hydric resources. The project would provide for first copper production by the end of 2027. 

4. Ecuador Labor profit sharing attributable to the State in mining sector
  • Holders of metallic and non-metallic mining concessions for small, medium and large-scale mining, marketing licenses and processing, smelting and refining plants must pay the labor profit sharing attributable to the State by April 15 of each year considering the following percentages:

    • 12% for large-scale mining.
    • 10% for medium-scale mining.
    • 5% for small-scale mining.
    • 12% for holders of marketing licenses and processing plants.

It cannot be extinguished through compensation with credit notes.

5. Peru Transfer Pricing reforms 
  • In June 2026, the Peruvian Tax Administration (SUNAT) clarified the timing for applying the additional transfer pricing valuation methods introduced by Legislative Decree No. 1663 and regulated by Supreme Decree No. 302-2025-EF. According to Report No. 000042-2026-SUNAT/7T0000, these methods (including discounted cash flow, multiples and other valuation techniques) apply to fiscal year 2025 transactions that remained pending valuation as of 18 December 2025, the date the regulation entered into force. Transactions already valued before that date are not subject to the new methods. 

  • In March 2026, SUNAT clarified the treatment of the Impuesto al Rodaje (IRO) applicable to gasoline imports used in the production of gasoholes. According to Report No. 000017-2026-SUNAT/7T0000, any excess IRO paid upon importation over the amount due on domestic sales cannot be carried forward to subsequent periods. Instead, such an excess must be recognized as a cost or expense. 

  • In January 2026, the Supreme Court confirmed that mining companies may choose between immediate deduction or amortization (up to three years) of development and preparation expenses under the General Mining Law, without additional formal requirements beyond the annual income tax return. This strengthens taxpayer flexibility in managing taxable income during project development phases.

  • In May 2026, the Tax Court established a binding precedent confirming that members of a consortium with independent accounting are jointly and severally liable for the consortium’s tax obligations solely by virtue of their participation, regardless of their role or ownership percentage. 

  • As from 1 January 2026, the OECD Multilateral Instrument became effective for several of Peru’s tax treaties (including those with Canada, Chile, Korea, Mexico and Portugal). The MLI introduces anti-abuse rules such as the principal purpose test, as well as changes to permanent establishment definitions and capital gains provisions. 

  • Effective 1 January 2026, Peru’s new three-year Regulatory Contribution framework entered into force for companies supervised by OEFA and OSINERGMIN in the electricity, mining and hydrocarbons sectors. The new regime replaces the 2023–2025 framework and establishes differentiated contribution rates for 2026, 2027 and 2028, together with updated rules governing the determination of the contribution base and applicable exclusions.

6. Colombia Potential tax reform Following the presidential elections held on 21 June 2026, Colombia elected a right-wing candidate as president, marking a significant shift from the policies pursued by the previous left-wing administration. The new government has now taken office, and a tax reform bill is currently expected to be presented toward the end of September 2026. While the scope of the proposal remains uncertain, the government has indicated that it may review legal stability agreements in the mining sector, among other measures. Additional changes affecting several industries are also being discussed, including a possible review of the surtax imposed on the oil and coal sectors, as well as a reduction in the general corporate income tax rate applicable to legal entities. PwC is closely monitoring these developments due to their potential impact on investment and competitiveness.
7. Venezuela New Venezuelan Master Hydrocarbons Law

The new Venezuelan Master Hydrocarbons Law, published in Official Gazette No. 6,978 Extraordinary on January 29, 2026, introduces a broad reform of the legal, regulatory, commercial, and fiscal framework applicable to the hydrocarbons sector. Its main objective is to create a more flexible and investment-oriented environment, while preserving State ownership over hydrocarbon reserves and maintaining strategic governmental control. The Law seeks to improve operational efficiency, attract private capital, and promote the development of oil and gas projects under a more competitive legal framework. 

One of the most significant changes is the simplification of the process for establishing oil joint ventures, as prior approval by the National Assembly is no longer required. The National Executive may now authorize these ventures and subsequently notify the legislative branch. The Law also strengthens the position of minority shareholders by allowing, subject to Ministry authorization, direct commercialization of production, management of bank accounts in any currency and jurisdiction, and participation in the technical and operational management of projects. These measures may increase investor confidence and reduce administrative barriers.

The Law introduces greater contractual and commercial flexibility by creating a new category of agreements between state-owned enterprises and private operators for the execution of primary activities. Under these arrangements, private operators may assume project management, costs, and risks, while ownership of the deposits remains with the Republic. Although State commercialization remains the general rule, the Government may authorize joint ventures and private operators to directly commercialize all or part of their production. Operators may also be compensated through controlled hydrocarbon volumes or other profit-sharing mechanisms approved by the Ministry. 

From a fiscal perspective, the reform creates a new Integrated Hydrocarbons Tax on gross monthly income, with rates of up to 15%, while repealing several existing taxes and sector-specific contributions. The royalty regime remains in force, with rates of up to 30%, although the National Executive may reduce royalties, income tax, and the Integrated Hydrocarbons Tax to preserve project viability. The Law also grants broad tax exemptions and introduces an economic and financial balance mechanism to mitigate adverse legal, fiscal, or regulatory changes. Overall, the reform represents a significant shift toward a more flexible, competitive, and investor-friendly hydrocarbons framework in Venezuela.

About the authors

James O'Reilly
James O'Reilly

Global EU&R Tax Leader, PwC Australia

James is a senior Australian tax partner and the PwC Global Energy, Utilities and Resources Leader.
Jonathan Forest
Jonathan Forest

PwC EU&R Strategic Execution Lead, PwC Australia

Jonathan is an Australian Tax Director and the PwC Global Energy, Utilities and Resources Strategic Execution Lead.

Contributors

Laetitia Le Roux, Energy, Utilities and Resources, South Market Tax Leader , PwC South Africa
Chris Winkelman, Energy, Utilities and Resources Industry Tax Leader & Energy Transition Leader , PwC Netherlands
Richard Bregonje, Bahrain Corporate Tax Leader , PwC Middle East
Bret Oliver, Energy, Utilities and Resources Tax Leader , PwC United States
Daniela Comitre, Energy, Utilities and Resources Tax Leader , PwC Peru

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James O'Reilly

Global EU&R Tax Leader, PwC Australia

Tel: +61 7 3257 8057

Jonathan Forest

PwC EU&R Strategic Execution Lead, PwC Australia

Tel: +61 450 674 548

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