Financial services tax digest - July 2026

In response to increasing fiscal pressure in the banking and insurance sectors, the Belgian federal government adopted the Program Law of 30 May 2026, introducing several tax measures affecting the financial services industry.

Insurance Premium Tax Increase

The Program Law of 30 May 2026 introduced an increase in the standard insurance premium tax rate from 9.25% to 9.6%. The measure formally entered into force retroactively on 1 April 2026, while its practical application depends on the premium due date. In practice, the new rate applies to premiums due as from 1 July 2026, irrespective of the date on which the insurance contract was concluded.

The premium due date is the decisive criterion for determining the applicable rate. This requires careful monitoring, particularly for instalments, annual premiums and adjustments.

Reduced rates, such as the 4.40% rate for certain life insurance policies, remain unchanged. The retroactive entry into force aims to prevent anticipatory behavior by taxpayers.

Impact: This results in a higher tax burden for insurers and policyholders, requiring updates to pricing, systems and premium collection processes.

Annual Tax on Securities Accounts Increase

The same law doubles the annual tax on securities accounts from 0.15% to 0.30%, applicable to reference periods ending on or after 1 June 2026.

The tax continues to apply where the average annual value exceeds €1,000,000, in which case it is levied on the full value of the account.  The taxable base remains the average value over the reference period (1 October to 30 September).

Belgian financial intermediaries remain responsible for withholding, reporting and payment, while account holders must comply directly for foreign-held accounts.

Existing anti-abuse rules (e.g. account splitting or conversion into registered instruments) remain applicable. Penalties and late interest continue to apply in case of non-compliance.

Impact: The measure may significantly increases the effective tax cost for high-value portfolios, and may trigger portfolio restructuring or relocation considerations for affected investors.

Banking Tax Increase

The Program Law also increases the annual bank tax applicable to credit institutions.

As from assessment year 2027, the rates are increased to:

• 0.19286% on liabilities up to €50 billion
• 0.25626% on liabilities exceeding €50 billion

In parallel, the taxable base is narrowed through targeted exclusions, to facilitate access to such funding mechanisms, including:

• liabilities related to European Investment Bank (EIB) funding for SME financing
• liabilities towards central counterparties are also excluded.

These changes aim to support financial stability and support economic activity while increasing tax revenues.

Impact: Belgian credit institutions will face a higher overall tax charge, although the base exclusions may partially mitigate the impact for specific funding structures, requiring a reassessment of balance sheet composition.

Capital Gain tax on Financial assets introduced

In April 2026, Belgium introduced a new tax on capital gains from financial assets, effective retroactively from 1 January 2026.

Private investors are generally subject to a 10% tax on realized capital gains (with an annual exemption of €10,000) on shares and other financial instruments. Higher rates or special rules apply in certain situations (e.g. 33% on certain internal share transfers, and differentiated rates up to approximately 10–16.5% for substantial shareholdings, with a separate €1 million exemption over a five-year period).

Compliance partly relies on financial intermediaries: as from 1 June 2026, Belgian banks and brokers are required to withhold capital gains tax on securities transactions, subject to an opt-out possible for the investor.

Further technical guidance is expected from the Belgian tax authorities, in particular regarding the scope of assets covered and the application of exemptions).

Impact: This measure introduces a structural taxation of private investment gains in Belgium, increasing the tax burden for investors and requiring operational and reporting adjustments by financial intermediaries.

Joeri De Ceuleneire (Tax Partner)

Marc Bressel (Tax Senior)

French tax consolidation group regime clarifications: Based on an Appeal Court decision, there should be no requirement for newly incorporated companies to close a financial year before joining a tax consolidation group.  Another Appeal Court decision also confirms that the elections for the French tax consolidation cannot have any retroactive effet.  These two recent French case law provide for additional clarifications on the French tax consolidation group regime that may prove to be useful in a context of M&A transactions, including in the banking sector.

1. No requirement for newly incorporated companies to close a financial year before joining a tax consolidation group.

Article 223 A of the French Tax Code (FTC) allows a parent company to constitute a tax consolidation group with its subsidiaries. The French tax authorities provide for in their guidelines that Article 223 A of the FTC requires the subsidiaries to close a first financial year before being included in a tax consolidation group^[1].

On April 16, 2026, the Administrative Court of Appeal of Marseille^[2] ruled that neither the wording nor the purpose of Article 223 A of the FTC provides for such a requirement for newly incorporated companies. Article 223 A of the FTC only provides for a specific deadline in which subsidiaries have to formalize their authorization to join the tax consolidation group to the French tax authorities, without requiring to close a financial year first.

In this context, the Administrative Court of Appeal of Marseille held that the administrative requirement to close a first financial year is an additional condition not provided for by French tax law and is therefore not binding on taxpayers.

This case law provides welcome clarification for newly incorporated company which may be included in a tax consolidation group as of its first financial year, thereby facilitating the prompt structuring of tax groups, particularly in the context of M&A transactions.

2. No retroactive effect for tax consolidation group regime election

Under Articles 223 and 223 A of the FTC, as well as Articles 46 quater-0 ZD and 46 quater-0 ZE of Appendix III of the FTC, the election letter for the French tax consolidation group regime has to be sent to the French tax authorities by the parent company at the latest by the deadline for filing the corporate income tax return for the fiscal year preceding the one in which the tax group regime is intended to apply.

On June 11, 2026, the Administrative Court of Appeal of Toulouse^[3] ruled (and confirmed the position usually taken by practionners) that French tax law does not offer any way to regularize a late election for the French tax consolidation group regime, including through a pre-litigation procedure with the French tax authorities. The validity of the election requires the parent company to exercise it within the specific deadline provided for by French tax Code.

In the context of M&A transactions involving a French tax consolidation group, it is crucial to perform a tax due diligence to verify the proper elections for the French tax consolidation regime as it may impact the validity of the French tax group and therefore the corporate income tax burden, the net operating losses to be carried forward and the financial expenses deductibility in France.

Jerome Labrousse, FS Tax Partner (Paris)

_{[1] BOI-IS-GPE-10-40, §100}

_{[2] Administrative Court of Appeal of Marseille, April 16, 2026, 25MA02058}

_{[3] Administrative Court of Appeal of Toulouse, June 11, 2026, 24TL01429}

Ireland proposes targeted changes to interest as a charge rules

The Irish Department of Finance has outlined targeted proposals to modernise Ireland’s interest as a charge rules. The changes are intended to address practical issues affecting group financing, investment and acquisition structures.

A key proposal would replace the current strict tracing requirement with a test based on the actual use of the loan. This should provide greater flexibility where loan proceeds are applied for qualifying purposes without cash moving through every step of a structure. Companies would still need to evidence the use of the loan through accounting entries, contracts and legal documents.

The proposals also include extending relief to borrowings used by an Irish parent company to fund capital contributions to wholly owned subsidiaries. This would better reflect common commercial funding arrangements within corporate groups.

Another welcome change would remove the requirement for a common director between relevant group companies. That simplification should reduce unnecessary governance and compliance complexity, particularly for larger or cross-border groups.

The Department is also considering a more proportionate approach to the “first use” of borrowed funds. Relief would be available for periods during which a loan is used for a qualifying purpose, but not for periods of non-qualifying use. The proposals would also recognise currency acquisition, including through swaps, as an ancillary step before applying funds for a qualifying purpose.

Further changes would refine anti-avoidance rules for intra-group lending and on-lending arrangements. In particular, certain restrictions may be disapplied where lending arrangements are already subject to transfer pricing rules.

The proposals also seek to improve the treatment of recovered capital that is reinvested for qualifying purposes. A further clarification would prevent disproportionate outcomes where one transaction could otherwise trigger multiple recoveries across several loans.

Overall, the changes would represent a welcome simplification for multinational groups, Irish holding companies and treasury structures. If enacted, the changes will be included in October’s Irish Finance Bill and take effect from 1 January 2027.

Joe Walsh (Director, Tax)

Italian Supreme Court confirms 95% Regional Tax (IRAP) exclusion for dividends received by banks and financial intermediaries

The Italian Supreme Court^[4] has held that banks and financial intermediaries determining their IRAP taxable base under Article 6 of Legislative Decree No. 446/1997 should include dividends in the net production value only up to 5% of their amount.

Background and rationale of the Decision

The case concerned a French bank operating in Italy through a permanent establishment, which sought a refund of IRAP paid on dividends received from Italian and non-European sources for tax years 2013 to 2016.

After the refund claim had been rejected by the Italian Revenue Agency and dismissed by the lower courts, the Supreme Court upheld the taxpayer’s position.

In line with the principles affirmed by the Court of Justice of the European Union in Banca Mediolanum, the Supreme Court confirmed that the 5% inclusion threshold applies not only for IRES purposes, but also for IRAP purposes.

The Court also relied on constitutional principles of equality and ability to pay, as well as on EU law principles protecting freedom of establishment and the free movement of capital.

Scope of application and operational implications

Accordingly, the exclusion may apply to EU dividends qualifying under the Parent-Subsidiary Directive, as well as to dividends from Italian and non-EU sources and, by interpretation, to EU dividends that do not meet the Directive’s requirements.

The Supreme Court decision materially broadens the IRAP exclusion regime for the financial sector and may reduce the taxable base for banks and financial intermediaries receiving dividend income.

Affected taxpayers should assess promptly whether refund claims may be filed for prior tax years and whether ongoing or future tax audits should be managed in light of this precedent.

Carlotta Padua (Manager) et Emanuele Amati (Senior Manager)

[4] Cass., 3 June 2026, n. 17650/2026

MDR rules to be narrowed from October 2026 - what banking groups should focus on

As from 1 October 2026, the Polish mandatory disclosure rules (DAC-6 or MDR) will be reshaped in a way that should materially reduce routine domestic reporting but increase the relative importance of cross-border MDR governance; however, the change is not without its challenges. Namely, all internal procedures for MDR in force in the Polish entities will require amendments, as changes encompass most significant aspects of reporting (material scope, roles, reporting requirements and deadlines, etc.).

The practical message is not that MDR disappears. Rather, the focus moves from broad, Polish-specific reporting of domestic arrangements to a more DAC6-style review of cross-border products, group transactions and structures. The changes are particularly relevant for banks, Polish branches of foreign banks and credit institutions, leasing companies within banking groups, asset managers and capital markets entities. These institutions typically operate through standardised documentation, cross-border funding and treasury flows, group service models, securities and derivatives platforms, and regulated confidentiality regimes.

All of these features may be relevant when deciding whether an arrangement falls within the new, narrower MDR perimeter.

Key takeaways for financial institutions

Main parameters of the amended MDR regime

The amending act significantly rewrites Chapter 11a of the Polish Tax Ordinance. The main technical changes can be summarised as follows:

• the MDR rules will apply to arrangements concerning taxes, excluding value added tax (including Polish VAT) and excise duty – so primarily income taxes, but also e.g. civil law transactions tax;
• the definition of a reportable arrangement will be linked to reportable cross-border arrangements; as a result, purely domestic tax schemes will no longer be subject to Polish MDR reporting;
• the definition of the main benefit test is changed and focuses on whether the main effect or one of the main effects that the relevant entity may expect from implementing the arrangement is a tax advantage;
• the hallmark architecture is aligned more closely with DAC6: general hallmarks remain relevant only together with the main benefit test, while the previous Polish-specific “other special hallmarks” are no longer applicable;
• the former “supporting entity” category is repealed, but certain entities providing ancillary assistance may be treated as promoters;
• the annual/periodic information on use of a tax scheme (commonly referred to as MDR-3) is simplified and signing/submitting by the proxy is allowed. MDR-2 information no longer applies;
• the statutory obligation to maintain an internal MDR procedure, and the related penalty provision for failure to have such a procedure, are repealed; and
• provisions excluding binding tax rulings are introduced.

From a risk-management perspective, the repeal of the statutory MDR procedure requirement should not be read as permission to dismantle MDR controls. Banks remain subject to fiscal penal exposure for non-reporting or late reporting, and the legal, operational and reputational consequences of an incorrect MDR position may still be material.

Why the changes matter for international banking groups

For many Polish taxpayers, the most visible effect of the amendment will be the disappearance of domestic MDR reporting. For widely understood financial services market, however, the more relevant question is where the boundary of the remaining cross-border regime will sit in practice. I.a. the following areas should remain within the core MDR review perimeter:

• cross-border treasury and liquidity arrangements, including group funding, cash pooling, back-to-back financing, intra-group guarantees and hybrid debt/equity features;
• capital markets products and securities transactions, including structures involving non-resident counterparties, funds, custodians or special purpose vehicles;
• portfolio transfers, synthetic risk transfers, securitisation or NPL disposal structures where the tax treatment differs materially between jurisdictions;
• restructurings, especially transfers of functions, risks or assets between Polish and foreign group entities that could affect projected EBIT;
• arrangements involving payments to entities in no-tax, low-tax or non-cooperative jurisdictions, or to recipients that are not tax resident in any jurisdiction;
• financial-account reporting and beneficial-ownership structures, including arrangements that may affect CRS, FATCA-style reporting or the identification of the beneficial owner; and
• leasing and asset-finance products involving a foreign lessor, foreign lessee, permanent establishment, cross-border asset use a leaseback element.

This is especially important for international banks operating in Poland through a branch or a subsidiary. A transaction that looks local from the perspective of the Polish client relationship may still have cross-border features at the level of funding, booking model, collateral, risk transfer, product manufacturing or group support functions.

Promoter, user and confidentiality: new practical allocation of responsibilities

The amended rules are built around two primary categories: the promoter and the user (korzystajacy). This is a relevant simplification, but it also changes how financial institutions should allocate responsibility internally and externally.

A bank or a group entity may fulfill the promoter role where it designs, organises, makes available or manages the implementation of a reportable cross-border arrangement. This may be relevant not only for tax-led structuring, but also for standardised financial products if the product is made available in a way that includes a tax advantage mechanism. Conversely, the client or group company implementing the arrangement may be the user. The repeal of the former supporting entity category does not fully eliminate risk for operational support teams, group service centres or advisers. If the assistance provided is sufficiently connected with developing, making available or implementing a reportable scheme and the statutory “knows or could reasonably be expected to know” it’s aiding implementation of the arrangement, the entity may need to consider whether it falls within the promoter concept.

For banks, confidentiality is a separate workstream. The amendment allows certain promoters bound by legally protected professional secrecy — in particular attorneys-at-law, advocates, tax advisers, patent attorneys and equivalent EU legal professionals — to refrain from reporting where the disclosure would breach that secrecy. This privilege does not extend to financial institutions merely because they are subject to sectoral confidentiality or bank secrecy rules. In the financial sector, the amendment goes in the opposite direction: it expressly enables MDR disclosures to the Head of the National Revenue Administration under the Banking Law and introduces analogous sectoral carve-outs for investment funds, trading in financial instruments, credit unions and insurance/reinsurance entities.

Operating leases: no longer routine domestic MDR

The treatment of operating leases deserves separate attention because leasing has been one of the areas where Polish MDR reporting created disproportionate operational work. In the General Ruling of 24 December 2024, the Minister of Finance confirmed that the mere conclusion of an operating lease agreement is often incorrectly treated as reportable only because leasing documentation is standardised. The general hallmark concerning standardised documentation is not sufficient on its own. Where a general hallmark is relied on, the main benefit test must also be satisfied.

In a purely domestic leasing scenario, the removal of domestic MDR reporting should mean that standard Polish operating leases - including standard bank-group leasing products offered on market terms - should generally fall outside Polish MDR from 1 October 2026. For cross-border leases, however, the position is different. The leasing arrangement should still be screened where, for example:

• the lessor, lessee, asset owner, group guarantor or a permanent establishment is located in another jurisdiction;
• the leasing product is used as part of a cross-border leaseback, asset transfer or group financing structure;
• the arrangement involves unusually high initial fees, residual value assumptions or pricing mechanics that may indicate that a tax effect was one of the main expected effects;
• the arrangement may result in double depreciation, double relief, different valuation of transferred assets or other asymmetries between jurisdictions;
• payments are made to entities in no-tax, low-tax or non-cooperative jurisdictions;
• the arrangement is combined with a structure that affects financial-account reporting or the identification of the beneficial owner; or
• the lease is embedded in a wider restructuring or transfer of functions, risks or assets.

In practice, the lessor should not be expected to conduct an unlimited investigation into the tax motives of each lessee. However, the lessor should escalate cases where the tax purpose is known or is reasonably apparent from the structure or the negotiated terms. For leasing companies within banking groups, the practical conclusion is to replace broad domestic MDR reporting with a decision tree focused on cross-border elements, DAC6 hallmarks and tax-motive indicators.

Transition: do not close the historical MDR file too early

The amendment enters into force, as a rule, on 1 October 2026. The transition rules are important because banking groups may have open reporting processes, pending MDR analyses and historical domestic scheme numbers.

In particular, where the reporting deadline under the previous rules expires on 30 October 2026, the old rules continue to apply. If a domestic, non-cross-border scheme was reported before the effective date of the amendment, the user should not file information on the use of that scheme after the amendment enters into force. There are also specific transition rules for standardised schemes first made available before the effective date but still made available afterwards.

Entities should therefore not simply deactivate their MDR workflow on 1 October 2026. Instead, they should run a closure review of the existing MDR inventory, distinguish domestic from cross-border arrangements, identify any pre-entry obligations that still have to be completed, and determine which historical MDR numbers will continue to be relevant.

Suggested next steps for banking groups

In light of the amendment, banks and wider financial groups operating in Poland should consider the following practical actions:

• map the existing MDR inventory and classify arrangements with focus on cross-border transactions and products;
• identify domestic MDR reports for which no future information on use should be filed after the amendment enters into force;
• prepare a cross-border MDR checklist for treasury, structured finance, capital markets, asset management, wealth management, transfer pricing and leasing teams;
• revise leasing product guidance so that domestic standard operating leases are no longer treated as reportable by default, while cross-border leases are screened against the narrowed MDR criteria;
• review confidentiality, bank secrecy and data-protection steps for MDR disclosures to the Head of the National Revenue Administration;
• train tax, legal, compliance, business and operations teams on the fact that the MDR burden is reduced but not eliminated; and
• monitor updated MDR forms, electronic filing structures and any Ministry of Finance guidance issued before the effective date.

The amendment is a welcome simplification from some standpoints. However, the result is a need to update MDR policies, checklists and governance materials to reflect the new scope, definitions, role allocation and reporting deadlines. Most entities are recommended to retain a proportionate internal MDR control framework even though the statutory internal procedure obligation is repealed. As Polish practice shows, even despite lack of such obligation due diligence procedures are recommended for certain areas with extensive requirements from the authorities (e.g. VAT, WHT), with MDR being a prime example.

Łukasz Kempa (Director, Tax)

Recent developments in dividend withholding tax – incremental changes ahead of a broader reform

Sweden’s dividend withholding tax framework is currently undergoing a period of gradual change, characterized by targeted legislative updates alongside a broader, EU-driven reform process that is still in its early stages.

The most immediate development is the introduction of an exemption from withholding tax for foreign sovereign investors. In May 2026, the Swedish Parliament approved new rules under which foreign states, as well as entities comparable to Swedish municipalities and regional authorities, are exempt from withholding tax on dividends from Swedish sources. The exemption entered into force on 1 July 2026. This change follows recent case law from the Court of Justice of the European Union (CJEU), which found that Sweden’s previous treatment of foreign public investors could infringe the free movement of capital. As a result, the amendment represents both a compliance measure with EU law and an effort to enhance the attractiveness of Swedish investments for foreign public sector investors.

In addition to this substantive change, the Swedish government has also proposed administrative improvements to the current system. A legislative proposal published in June 2026 introduces the possibility for companies to submit withholding tax information electronically and expands the Swedish Tax Agency’s powers to request information. These changes are expected to enter into force on 1 January 2027 and aim primarily to streamline reporting and strengthen tax control, rather than to alter the underlying tax rules.

At the same time, a comprehensive reform of Sweden’s withholding tax regime remains pending. Earlier proposals to replace the current Coupon Tax Act (dating back to 1970) with a modernized framework have not been implemented. Instead, in January 2026 the government launched a new inquiry tasked with reviewing the entire system, including both substantive rules and administrative procedures. The review is closely linked to the implementation of the EU’s upcoming FASTER directive, which seeks to harmonize withholding tax procedures within the EU. The inquiry is expected to report its findings by August 2027.

In summary, Sweden is currently maintaining its existing withholding tax framework while introducing incremental adjustments. Although recent changes – particularly the exemption for foreign states – have immediate relevance, more fundamental reform is likely to be driven by EU developments and will materialize over the coming years rather than in the short term.

Jenny Stenesjö Wöhrman (Tax Lawyer, Partner)

Following a Federal Supreme Court ruling (November 2024), the Swiss Federal Tax Administration (SFTA) updated its practice in February 2026, bringing greater clarity—and in many cases relief—for employee participation plans. Transfer stamp tax only applies if securities are transferred for consideration and a Swiss securities dealer is involved. The key issue for employee participation plans is whether an employee’s work performance constitutes such consideration.

Updated Treatment of Common Plans

Restricted Share Units (RSU) / Performance Share Units (PSU) plans: No tax on share allocation, as these instruments are not taxable securities and involve no consideration.

• Free shares: Not subject to tax due to absence of payment.
• Discounted shares: Tax applies only to the price actually paid by employees.
• Stock options: Tax arises only upon exercise, based on the exercise price.
• Shares as compensation: Tax applies where shares replace salary, as this constitutes consideration.

Key takeaway

The Court clarified that employee work performance does not qualify as taxable consideration. As a result, many modern share-based plans - especially RSUs and PSUs - are now generally outside the scope of transfer stamp tax. Companies should therefore review their plans carefully, focusing on whether any form of consideration exists, and continue to assess each structure on a case-by-case basis.

André Kuhn, Partner, Forvis Mazars Switzerland

Tax case on accounting for debt and share warrants

In June, the Upper Tribunal (“UT”) considered and appeal by Barclays Bank plc^[5] of the First Tier Tribunal (“FTT”)’s rejection of an apportionment of a £3bn finance raising between interest-bearing debt and share warrants.^[6]

In 2008, Barclays Bank plc issued interest-bearing reserve capital instruments (“RCIs”), raising £3bn from two subscribers. Simultaneously, for nominal sums, its parent, Barclays plc, issued warrants to the subscribers. In its accounts, Barclays Bank plc apportioned £800m as fair value of the warrants, and credited that sum as a capital contribution from Barclays plc. The remaining £2.2bn was apportioned as fair value of the RCIs. The resulting £800m discount accreted to profit and loss until the RCIs were redeemed at par in 2019. This discount was claimed as a loan relationship debit under what is now CTA 2009 s307.

Amid differing expert accounting evidence, the FTT regarded the accounting apportionment as not in accordance with generally accepted accounting practice, finding that in substance and economic reality the £3bn was paid for the RCIs alone, so the fair value of the RCIs should have been £3bn, and no discount should have accrued as the RCIs pulled to par.

However, the UT held that the FTT had erred in aspects of its judgment, stating:  

It does appear to us that the FTT wrongly considered that the Warrants would not be a sweetener unless they were given away … It does not necessarily follow … that the £3bn was being paid for the RCIs and the Warrants were only motivational because they were being given away.  We are satisfied that the FTT did err in its analysis in the following respects:

1.      The FTT gave weight to press comment at the time of the transactions which described the Barclays' shareholders as giving away £800m value. The FTT used that evidence in reaching its conclusion rather than as a cross-check to a conclusion reached on … objective evidence.

2.      The FTT wrongly viewed its analysis that it was Barclays' shareholders and not Barclays itself which was giving away value.

3.      The FTT wrongly placed reliance on the PCP case^[7] to the effect that the Warrants had been given away.

4.      The FTT wrongly considered that … the Subscribers were only getting a good deal, if the Warrants were being given away.

The UT therefore remitted the case back to the FTT to reconsider the key issues.

Comment on the UT’s decision

Judges face difficulties in identifying the correct accounting for a transaction when presented with differing expert accountants’ evidence.

The £3bn financing was raised by Barclays at the height of the 2008 financial crisis. Amid rapidly changing circumstances, documents, such as evidence of accounting rationale, did not perfectly reflect the actual transaction. Years after the event, individual witnesses were not available to explain the context.

The case shows the importance of taking advice and keeping contemporaneous records, even when transactions are done at pace, to record the rationale for transactions and their accounting treatment.

Ian Thomson (Associate Director, Tax)

Christopher Lallemand (Associate Director, National Tax)
 

^{[5] Barclays Bank plc v  HMRC [2026] UKUT 212}

^{[6] Barclays Bank plc v HMRC [2024] UKFTT 246}

^{[7] PCP Capital Partners LLP v Barclays Bank plc [2021] EWHC 307 (Comm)}