July 2026

Bulgaria has introduced a series of changes to its social security contribution framework following the adoption of the 2026 State Social Security Budget. The new measures, which will take effect in August 2026, update contribution thresholds and introduce changes to the allocation of social security contributions for certain categories of employees. The reform forms part of the country's broader efforts to modernise its social security system and ensure that contribution rules continue to reflect developments in the labour market while supporting the long-term sustainability of the public social insurance system. Key developments Among the most significant measures is the revision of the income thresholds used to calculate mandatory social security contributions. The changes affect both self-employed individuals and the maximum contribution base, resulting in adjustments to the contribution obligations applicable to certain taxpayers. The legislation also introduces a new contribution-sharing mechanism for civil servants. Once the new rules become effective, public sector employees will contribute directly towards their social security obligations, replacing the previous system under which these contributions were fully financed by the State. The mandatory health insurance contribution rate, however, remains unchanged. Implications for employers Businesses operating in Bulgaria will need to review their payroll processes and ensure that employment and payroll systems are updated to reflect the revised contribution thresholds and the new contribution allocation rules where applicable. Depending on the workforce structure, the changes may also have an impact on employment costs and should therefore be considered as part of payroll compliance and workforce planning activities. Looking ahead The adoption of these measures represents another step in Bulgaria's ongoing efforts to strengthen its social security framework and adapt contribution rules to evolving economic and employment conditions. Companies with operations in Bulgaria should closely monitor the implementation of the new provisions and assess any practical implications for their compliance and payroll obligations.

Hong Kong has strengthened its framework for the Automatic Exchange of Information (AEOI) through legislative amendments approved by the Legislative Council in June 2026. The updated provisions reinforce the jurisdiction’s alignment with the OECD’s Common Reporting Standard (CRS) and reflect recommendations arising from the OECD peer review process.

Since implementing the CRS in 2018, Hong Kong has participated in the international exchange of financial account information with partner jurisdictions, supporting global initiatives aimed at enhancing tax transparency and combating cross-border tax evasion.

The legislative amendments focus on reinforcing the administrative aspects of the existing AEOI regime rather than changing the underlying reporting framework. Among the key measures introduced are mandatory registration requirements for reporting financial institutions, enhanced record-keeping obligations and a strengthened penalty regime for cases of non-compliance. Together, these measures are intended to improve the efficiency, consistency and integrity of the reporting system.

The updated framework will enter into force on 1 January 2027. Prior to its implementation, the Inland Revenue Department is expected to publish additional guidance and technical information to support financial institutions in meeting the new administrative requirements.

Practical implications

Hong Kong has taken another step in strengthening its position as an international financial centre by introducing new rules that allow stamp duty on eligible dual-counter stock transactions to be settled in Renminbi (RMB).

The legislative amendment forms part of the government's broader strategy to support the development of RMB-denominated financial markets and facilitate the wider use of the Chinese currency in cross-border investment activities.

Under the new framework, investors trading securities listed under the dual-counter model will be able to calculate and pay the corresponding stamp duty directly in RMB. This approach is expected to simplify settlement procedures for market participants operating through the RMB counter while improving operational efficiency.

The reform also supports the continued expansion of Hong Kong's offshore Renminbi ecosystem. By allowing tax obligations to be settled in the same currency used for the underlying transaction, the measure aims to enhance liquidity within RMB trading activities and encourage greater participation in RMB-denominated securities.

Before the new regime becomes operational, market infrastructure providers and relevant authorities will complete the necessary technical and administrative preparations to ensure a smooth implementation.

For businesses, financial institutions and international investors, the development represents another example of Hong Kong's ongoing efforts to modernise its capital markets while reinforcing its role as a gateway between Mainland China and global financial markets.

Singapore continues to strengthen its international tax cooperation framework by expanding the network of jurisdictions participating in the automatic exchange of Country-by-Country (CbC) Reports. This development forms part of the broader evolution of international tax transparency standards promoted by the OECD through the Base Erosion and Profit Shifting (BEPS) initiative and reflects the continued enhancement of cooperation mechanisms between tax authorities worldwide. An evolving framework for tax transparency Country-by-Country Reporting has become a key component of the international tax transparency framework, enabling tax authorities to exchange information and improve risk assessments related to cross-border taxation. The expansion of participating jurisdictions highlights the ongoing commitment to greater transparency and reinforces international cooperation in the automatic exchange of tax information. Implications for multinational businesses For multinational enterprise groups, these developments underline the importance of maintaining robust tax compliance processes and ensuring the accuracy and consistency of information reported to tax authorities. Aligning Country-by-Country Reports with transfer pricing documentation and other tax compliance obligations remains an essential element of effective tax governance. As international cooperation continues to expand, organisations are increasingly expected to maintain high standards of data quality and well-established internal compliance procedures.

In Ruling No. 126/2026, the Italian Revenue Agency provided an important clarification regarding the application of the Agreement between Italy and Switzerland on the taxation of frontier workers. In particular, it confirmed that the fact that an employer’s registered office is located outside the Italian frontier area does not, in itself, prevent the application of the Agreement, provided that the employer is tax resident in Italy and all the other applicable requirements are met.

The clarification arose from the case of an employee who was tax resident in a municipality in the Canton of Ticino located within 20 kilometres of the Italian border. The employee worked as a pharmaceutical sales representative for an Italian company whose registered office was located in the Veneto region. She carried out all her employment activities in Lombardy and, in principle, returned daily to her residence in Switzerland.

According to the Italian Revenue Agency, the bilateral Agreement requires the employee to reside in the frontier area of one Contracting State, to perform employment activities in the frontier area of the other State for an employer that is tax resident in that other State, and, in principle, to return daily to their place of residence. However, the Agreement does not require the employer’s registered office to be located within the frontier area.

Accordingly, the fact that a company’s registered office is situated in an Italian region other than Lombardy, Piedmont, Valle d’Aosta or the Autonomous Province of Bolzano does not exclude the application of the Agreement, provided that the employment activities are actually carried out within the Italian frontier area and all the other relevant conditions are satisfied.

The Revenue Agency’s ruling provides greater legal certainty for both employers and frontier workers. Nevertheless, the specific circumstances of each employment relationship should continue to be carefully assessed, particularly with regard to the tax residence of the employee and the employer, the place where the employment activities are effectively carried out, and compliance with the other requirements laid down in the Agreement.

The United Arab Emirates' Federal Tax Authority (FTA) has issued a new Public Clarification on how taxpayers should report downward transfer pricing adjustments within their Corporate Tax Returns. The clarification provides greater certainty for businesses seeking to ensure that related-party transactions comply with the arm's length principle while meeting the country's corporate tax requirements.

According to the clarification, taxpayers may make qualifying downward transfer pricing adjustments directly within their Corporate Tax Return without obtaining prior approval from the FTA. However, these adjustments remain subject to review during future tax audits, making robust documentation essential.

The clarification also highlights that taxpayers should disclose all related-party transactions for which a downward adjustment is made, regardless of the value or nature of the transaction. This reinforces the importance of transparency in transfer pricing reporting and aligns with the UAE's broader tax compliance framework.

From a documentation perspective, businesses are expected to maintain sufficient evidence supporting the adjustment, including the commercial rationale, transfer pricing analysis, reconciliation between accounting and tax figures where applicable, and documentation demonstrating the corresponding treatment by the related party.

The clarification further specifies that it applies only to downward adjustments made under the relevant provisions governing self-assessment within the UAE Corporate Tax regime and does not extend to other adjustment mechanisms provided under the legislation.

Why this matters

The clarification provides additional certainty for multinational groups operating in the UAE by outlining the conditions under which downward transfer pricing adjustments can be reflected in tax returns. Companies engaging in cross-border related-party transactions should review their transfer pricing policies, documentation processes and tax reporting procedures to ensure they remain aligned with the latest administrative guidance.

The United Arab Emirates Federal Tax Authority (FTA) has released an updated version of its guidance on Private Clarifications, the administrative mechanism through which taxpayers may request official guidance on the application of UAE tax legislation to specific factual situations.

The revised guidance reflects recent developments in the UAE tax framework and provides additional procedural information on how clarification requests should be submitted. Particular attention is given to matters relating to the Pillar Two Top-up Tax, following the introduction of the global minimum tax rules within the UAE tax system.

Private Clarifications are an important tool for businesses seeking greater certainty when dealing with complex tax matters. Although they do not constitute generally binding legislation, they enable taxpayers to obtain the FTA's interpretation before taking significant tax positions, thereby helping reduce uncertainty and supporting voluntary compliance.

The updated guide also clarifies who is eligible to submit a request. Besides the taxpayer concerned, certain authorised representatives may file applications, while designated filing entities may do so in relation to Pillar Two matters where permitted under the applicable rules. Requests must continue to be submitted through the EmaraTax platform and comply with the procedural requirements established by the FTA.

In addition, the guidance provides further clarification on the scope of the procedure, emphasising that requests should relate to genuine areas of uncertainty under the tax legislation and outlining situations in which an application may be declined. It also summarises key procedural aspects, including indicative response times and the applicable administrative fees.

The update comes at a time when the UAE tax framework continues to evolve rapidly. The introduction of Corporate Tax and the implementation of the OECD's Global Minimum Tax rules have increased the need for clear administrative guidance, particularly for multinational groups operating across multiple jurisdictions.

For businesses with operations in the UAE, the revised guidance reinforces the FTA's commitment to improving transparency, strengthening tax certainty and providing practical support as taxpayers adapt to the country's expanding tax regime.

The Government has announced a broad programme of tax and customs reforms aimed at simplifying compliance, modernising tax administration and improving the efficiency of HM Revenue & Customs (HMRC).

Presented by the Treasury on 23 June 2026, the initiative builds on HMRC's Transformation Roadmap and outlines a series of consultations and policy measures that are expected to shape the future development of the UK's tax framework.

Among the key areas under review are improvements to the Pay As You Earn (PAYE) system, changes to VAT administration, reforms affecting online marketplace VAT rules, and updates to procedures governing the taxation of land and property transactions. The Government also intends to review aspects of the tax treatment of overseas hybrid entities, including certain US limited liability companies (LLCs), following the launch of a dedicated consultation.

The roadmap further includes proposals to simplify individual savings arrangements and strengthen existing savings support schemes, alongside initiatives designed to streamline customs procedures and enhance HMRC's digital capabilities.

While most of the measures remain at the consultation stage, the announcement provides a clear indication of the Government's long-term strategy to reduce administrative complexity and create a more efficient tax system for both businesses and individuals.

Businesses with UK operations or cross-border activities should continue monitoring these developments, as several of the proposed reforms could lead to changes in compliance obligations over the coming years.