Financial services tax digest - September 2026

CJEU Advocate General challenges Swedish treatment of loss-making non-resident shareholders receiving Swedish dividends regarding withholding tax refund 

On June 18, 2026, the CJEU Advocate General addressed a question regarding the taxation of cross-border dividend flows within the European Union in the context of the Case C-241/25, Société Générale SA v Skatteverket, the Swedish tax authorities.  

The dispute arose after Société Générale, a French tax resident in a loss-making position, was charged with a Swedish withholding tax on dividends received from Swedish companies. The French bank asked for a withholding tax refund, arguing that it should benefit from the same treatment as a Swedish company in a comparable situation regarding taxation. Under Swedish rules, dividends received by a resident company in a loss-making position may benefit either from a deferral of taxation until a return to profitability or from a full reimbursement. The Swedish tax authorities asked Société Générale to recalculate its loss position in accordance with the tax rules of Sweden in order to benefit from the same treatment as the one available for resident companies in a comparable situation.  

The Sweden Supreme Administrative Court asked the CJUE Advocate General whether requiring a recalculation of the loss in accordance with the rules of the source State, in order for a loss-making non-resident company receiving dividends to benefit from the same treatment as a loss-making resident company, is contrary to the free movement of capital provided for by Article 63 of the TFEU.  

Relying on CJUE’s previous judgments, the CJUE Advocate General: 

indicated that, once a Member State taxes both resident and non-resident shareholders on dividends received from domestic companies, their situations become sufficiently comparable for the purposes of EU law; and 

considered that concerns relating to tax avoidance or effective tax collection do not justify a requirement to compute losses under Swedish tax rules for non-resident companies. Tax authorities can rely on proof of loss calculated in accordance with the rules of the non-resident company’s State and on administrative cooperation mechanisms between Member States.

The Advocate General concluded that Article 63 of the TFEU must be interpreted as precluding legislation of a Member State that would require a non-resident company receiving dividends subject to withholding tax, in order to benefit from the same treatment as that provided for resident companies receiving dividends and in a loss-making situation, to calculate its loss in accordance with the tax rules of the source State. 

If followed by the Court, the judgment could significantly strengthen the protection of cross-border investors and further limit discriminatory withholding tax practices within the EU. Banks concerned should consider initiating legal proceedings in order to preserve their rights and avoid any statute of limitations issues. 

Jerome Labrousse, FS Tax Partner (Paris)  

Ireland’s new investment account: key tax considerations for providers 

The Irish Government has confirmed that it intends to introduce a new tax-favoured “Investment Account” regime from 2027 as part of its wider reform of the taxation of retail investments. The initiative, outlined in a roadmap published by the Department of Finance, is designed to encourage greater participation in capital markets and aligns with the European Commission’s recommendations on Savings and Investment Accounts.  

While the policy objective is investor-focused, the roadmap makes it clear that providers will play a central role in the operation and administration of the new regime. Indeed, one of the stated purposes of publishing the account design parameters now is to enable the industry to begin developing the necessary operational and reporting infrastructure ahead of the planned launch. 

The proposed Investment Account will operate as a tax wrapper for qualifying investment products rather than as a standalone investment vehicle. According to the roadmap, the account will be based on a taxation account model, with eligibility criteria relating to account holders, contribution limits, qualifying products and qualifying providers. The Government also intends to introduce the legislative framework as part of Budget 2027.  

For providers, the significance lies less in product manufacturing and more in compliance and administration. The roadmap specifically identifies “qualifying providers” and the “role of providers” as core features of the regime, signalling that regulated financial institutions will be expected to administer the tax benefits and monitor adherence to the account rules.  

Although detailed legislation has yet to be published, providers should expect responsibilities broadly comparable to those seen in other tax-advantaged savings regimes internationally. These are likely to include verifying investor eligibility, monitoring contribution limits, administering withdrawals and transfers, maintaining records linked to the investor’s tax identification numbers (TIN) and providing information reporting to the Irish tax authorities. The roadmap highlights tax residence, TIN requirements, portability and flexible withdrawals as key design features, all of which will require supporting operational processes. 

Importantly, the Department of Finance acknowledges that providers will need sufficient lead time to build these systems. The roadmap notes that the publication of the proposed parameters is intended to facilitate the design and implementation of the necessary operational infrastructure so that accounts can be made available from 2027.  

The new regime presents a potentially significant commercial opportunity for banks, life assurance companies, fund distributors and investment platforms serving the Irish retail market. As Irish policymakers seek to channel a greater proportion of household savings into investment products, providers with scalable digital onboarding, tax reporting and account administration capabilities may be particularly well positioned to capture market share. 

For prospective providers, the immediate priority will be monitoring the development of the Budget 2027 legislation and assessing the operational changes required to support the new account structure. Although many of the detailed tax administration requirements remain to be finalised, the roadmap sends a clear signal that providers will be at the heart of Ireland’s new retail investment framework, and that early preparation will be essential to take advantage of the opportunity from day one. 

Joe Walsh, Partner, Financial Services Tax Ireland 

R&D spending recommendations for financial institutions 

Financial services institutions have long invested in software and technology to facilitate business operations and serve customers. In recent years, that investment has increasingly incorporated artificial intelligence (AI) in more meaningful ways. 

These AI investments are helping companies develop software, automate processes, analyze data and solve complex technical problems. AI is also influencing the pace of development, the cross-functional teams involved and the mix of resources required to support these efforts. 

The continued adoption of AI, combined with recent legislative and administrative changes related to the tax treatment of research and development (R&D) costs, has created a dynamic environment that should be considered as part of this year’s tax filing. These considerations include both compliance-related risks and opportunities to increase incentives associated with R&D spending, which include turning AI investments into tax savings. 

1. Understand the opportunity for tax incentives 

The R&D tax credit was introduced in 1981 to incentivize investment in R&D activities through a reduction in tax liability. The credit provides a dollar-for-dollar offset of tax liabilities, subject to certain limitations. 

The credit is available for qualified research activities related to the development or improvement of a product, process, computer software, technique, formula or invention. These activities must be intended to achieve new or improved functionality, performance, reliability or quality. Qualification does not require successful development, nor does it require creating entirely new knowledge within an industry or field of science or engineering. 

The credit is calculated by comparing current-year spending to a historical base amount, with applicable credit rates generally ranging from 6% to 20%, depending on the calculation method used. The R&D tax credit can be carried back one year and forward 20 years in situations where there is not sufficient tax liability to utilize the credit in the year in which the credit is generated. Many states also provide tax credits for R&D activities.

2. Evaluate software development activities and investments 

Consider how your organization has invested in software and technology in recent years. Have these investments resulted in new or improved functionality, performance, reliability, or quality within your software platforms or systems? In addition, assess whether these investments represent purchased software or costs associated with developing a software solution under the Internal Revenue Code. If spending is classified as software development that creates new or improved features, functionality, or capabilities, there may be an opportunity to treat these costs as qualified research expenses (QREs) for tax purposes and claim R&D tax credits to help offset the cost of these investments. 

3. Understand your software development life cycle (SDLC) 

Developing an understanding of your organization’s SDLC can provide insight into how related activities and costs should be reflected in your tax returns. Key considerations include how the stages of the SDLC align with tax definitions of R&D activities, who within the organization participates in each stage of development and what documentation or project/cost tracking exists to support these activities. AI’s increasing involvement is also changing the mix of personnel participating in development and the activities they perform. Understanding these changes may help identify a broader cross-section of employees and roles whose activities could be considered in your R&D tax credit.

4. Assess how development dollars are being spent 

In addition to changing the teams that participate in the development life cycle, AI is also influencing the types of costs incurred to support development efforts. These costs may include investments in infrastructure, cloud hosting, AI licensing, compute usage (e.g., tokens) and third-party consulting. Developing an understanding of how these costs are incurred and categorized is important for evaluating how they should be treated in your tax return and for enhancing available deductions and credits. 

5. Evaluate the impact of AI on the pace of development 

AI is accelerating development across SDLC phases – including requirements and design, build, testing and deployment – by enabling faster translation of business requirements into technical specifications, improving issue triage and test generation and enhancing security and compliance reviews through automated policy and vulnerability checks. 

Understanding how this acceleration affects development costs within a given period, as well as how the expanded use of AI and increased automation aligns with tax definitions of R&D, is important for projecting the timing of deductions and potential tax incentives. Companies should also evaluate how AI is being incorporated into the SDLC to assess whether underlying activities align with R&D tax credit qualification requirements. 

6. Assess where development activities are performed 

The location of development activities can significantly impact tax treatment. Onshore development activities may qualify for immediate expensing and may be eligible for the R&D tax credit, while offshore development activities are generally required to be capitalized and amortized over a 15-year period and are not eligible for the R&D tax credit. 

For onshore activities, the state in which development occurs can also affect tax treatment. Some states have not conformed to the provisions in the One Big Beautiful Bill Act (OB3) related to domestic research and experimental expenditures (DREEs), which may impact the timing of deductions for R&D spending when determining state tax liability. In addition, certain states offer their own R&D tax credits for development activities conducted within their jurisdiction, which may help maximize the tax benefits of development investments.

7. Consider your options under the OB3, and make your elections 

Under the OB3, companies have options for the federal treatment of DREEs for tax years beginning after December 31, 2024, including the ability to immediately expense such costs. Companies may also elect to accelerate the amortization of DREEs that were previously capitalized under Tax Cuts and Jobs Act (TCJA) guidance. 

Modeling the impact of these options and elections is an important step in determining the most effective approach, including evaluating how accelerated deductions may affect taxable income and other tax concepts and attributes. It is also important to understand the process of making these elections. Depending on the approach, companies may need to file a statement in lieu of Form 3115 to adopt a method under the OB3 or make an election under the applicable transition guidance for costs previously capitalized under the TCJA. In addition, the acceleration of the unamortized tax basis of DREEs in tax years beginning after December 31, 2024 may trigger a tax loss, which in turn may require any R&D tax credit claimed in 2025 to first be carried back to the prior tax year, requiring amended return claims and documentation to be compiled in support of Chief Counsel Memorandum 202114101F. 

8. Evaluate the impact of IRC§280C 

Internal Revenue Code (IRC) Section 280C provides guidance on the treatment of expenses used to support a tax credit. When R&D costs are included in the R&D tax credit, §280C generally requires a corresponding reduction to the deduction associated with those costs by the amount of the credit claimed. 

Companies can account for this impact either through an election on the R&D tax credit form or by making a book-to-tax adjustment to allowable deductions. The application of IRC§280C was affected by the requirement to capitalize DREEs and the conforming amendment under the TCJA, and many companies interpreted these changes to limit the adjustment in certain situations. As a result, some companies were able to claim larger R&D tax credits in recent years without reducing the credit or related deductions. 

However, §280C was modified under the OB3, reinstating its impact on R&D deductions. Companies should reassess how this provision applies to their R&D tax credit calculations and related deductions, particularly in situations where they are in a net operating loss position. 

9. Prepare for evolving R&D tax credit reporting requirements 

In recent years, the IRS has issued guidance in multiple forms to indicate its intent to obtain more detailed information with R&D tax credit claims, primarily through updates to Form 6765 and its instructions. Beginning with 2024 filings, companies were required to provide additional disclosures related to their R&D tax credit claims, including a count of their business components and other informational items that could impact credit calculations. 

Additional reporting requirements are scheduled to take effect for 2026 credit claims and may be more consequential. Companies will be required to provide detailed information on each business component representing 80% of total qualified research expenses, up to a maximum of 50 business components. This includes listing each business component, identifying its type and reporting the amount of each category of QREs associated with it. 

Companies should begin planning now to help ensure they can capture and report the level of detail required to comply with these expanded reporting requirements. 

10. Assess potential for an uncertain tax position 

Companies should evaluate whether a reserve for uncertain tax positions is appropriate in connection with their R&D tax credit. It is not uncommon for companies to reserve a portion of the credit based on the specific facts and circumstances of their claim. 

Financial service institutions should use the information above to reflect on activities performed in the current tax year, including AI-related development, and proactively plan for future investments. This includes incorporating these considerations into decisions regarding where investments are made, how costs are categorized and captured and how documentation is maintained. 

Taking a proactive approach can help companies better project taxable income, enhance tax incentives associated with R&D spending and meet applicable compliance and reporting requirements related to their DREE deductions and R&D tax credit claims. If you have any questions or need assistance, please reach out to a professional at Forvis Mazars (/contact-us).  

Leigh Hayes, Tax Partner US 

Foreign single-investor funds: Supreme Court confirms transfer stamp tax exemption 

In decision 9C_697/2024 of 2 June 2026, the Swiss Federal Supreme Court held that a Liechtenstein single-investor fund qualified as a foreign collective investment scheme and therefore as an exempt investor for Swiss transfer stamp tax purposes. The Liechtenstein context is particularly relevant because the Principality is treated as domestic territory for Swiss stamp duty purposes under the Customs Union Treaty of 29 March 1923, and Swiss stamp duty law applies in Liechtenstein. 

Executive summary 

A Swiss company was the sole investor in a Liechtenstein alternative investment fund. The fund was managed by a Liechtenstein fund manager, had a Liechtenstein depositary and was supervised by the Liechtenstein Financial Market Authority. The Swiss Federal Tax Administration (SFTA) nevertheless denied the exemption because the fund had only one investor and, in its view, did not meet the requirements applicable to a comparable Swiss collective investment scheme. 

The Supreme Court ruled against this approach. Swiss law deliberately distinguishes between Swiss and foreign collective investment schemes. Accordingly, a foreign fund must be assessed under the separate statutory category for foreign schemes and cannot be denied exempt-investor status merely because an equivalent Swiss structure would be prohibited or restricted under Swiss supervisory law. 

A foreign single-investor fund may therefore qualify for the exemption where this type of fund is permitted by the competent foreign supervisory authority, and the relevant jurisdiction is recognised by the SFTA. These conditions were met for Liechtenstein. The judgment provides greater legal certainty for supervised foreign single-investor funds but does not address unsupervised foreign funds. 

Key takeaways

Supervised foreign single-investor funds should qualify as exempt investors if they are recognised as collective investment schemes in their home jurisdiction. Existing structures and transaction flows should be reviewed, particularly where Swiss transfer stamp tax has been charged or reserved. Unsupervised funds may still qualify under the equivalence rule if they are comparable to a Swiss single-investor fund and the sole investor meets the qualified-investor requirements. 

André Kuhn, Partner, Forvis Mazars Switzerland 

Yann Waeber, Senior Manager, Forvis Mazars Switzerland 

Alexandre Sadik, Executive Director, Swiss Tax Expert, Forvis Mazars Switzerland 

Swiss VAT and intermediation in the Finance industry: the perpetual controversy

Intermediation is one of the most fact-sensitive areas of Swiss VAT for banks, securities firms, asset managers and other financial service providers. Depending on contents and approaches intermediation can be VAT exempt without credit or taxable/VAT exempt with credit.

And depending on the place where the concerned party sits in the financial transaction chain subject to the intermediation, said party may greatly favour one VAT qualification or another.

What constitutes intermediation?

Intermediation is defined (in the finance industry) as the activity of a person helping to bring about the conclusion of a contract between two parties in the money and capital markets, without being a party to the contract in question and without having any interest of its own in the content of that contract.

This normally means identifying or approaching a potential counterparty, bringing the parties together, transmitting or discussing transaction terms or otherwise participating in the process leading to the contract (while not being part of the contract itself).

Intermediation is VAT exempt without credit, as the underlying deal – i.e. the sale of shares, bonds, derivatives, etc. – is VAT exempt without credit as well.

On the contrary, if the intermediary activity is not directly linked to a specific commercial transaction or is not connected with transactions that will subsequently be carried out, it does not qualify as intermediation. The activity of simply introducing clients instead constitutes a service in the field of advertising or the provision of information.

Typically, a pure “tipster” – or a finder who supplies a name without becoming involved in the concrete process of bringing the parties to an agreement – is therefore generally considered to perform marketing activities and not intermediation. And marketing is taxable/VAT exempt with credit (even if commission-based or success fee-based).

As a result, the Federal Tax Administration (FTA) will likely consider, in doubt about the qualification, that it is taxable/VAT exempt with credit.

Determining “interest” in intermediation

The key controversy lies with the concept of “having any interest of its own”. If a party has any interest, the activity is taxable/VAT exempt with credit.

Recently, the Swiss Administrative Federal Court has, via various decisions, given some guidance in this matter:

a)     The mere fact of receiving a commission for the intermediation does not generate in itself an “interest of its own” (case A-801/2025).

b)     The majority ownership of the entity paying the intermediation fee to its intermediating majority shareholder may generate an interest of its own for said shareholder (case A-7215/2025).

Of course, the Swiss Supreme Court may render opposite decisions, and the cases where “having any interest of its own” will be discussed and argued are well beyond these two cases which went to court. But these decisions still help provide some guidance for navigating intermediation.

For this reason, the safest approach is a transaction-by-transaction review supported by consistent contracts, invoices and operating evidence. And one should not forget the widely used Swiss practice of rulings, by which the taxpayer asks – preferably in advance – for the precise position of the FTA in a specific case. Many complex cases have been – and will continue to be – happily resolved this way.

Alexandre Sadik, Executive Director, Swiss Tax Expert, Forvis Mazars Switzerland

André Kuhn, Partner, Forvis Mazars Switzerland

Yann Waeber, Senior Manager, Forvis Mazars Switzerland

Recent developments in Singapore's asset management and withholding tax landscape

Singapore has announced new measures to strengthen its position as a global asset management hub, while the Inland Revenue Authority of Singapore (IRAS) has provided further clarification on the withholding tax treatment of certain cross-border financing arrangements. Together, these developments highlight Singapore's continued focus on enhancing its investment ecosystem while providing greater certainty on the application of its tax rules.

Measures to strengthen Singapore's asset management sector

On 19 August 2026, the Monetary Authority of Singapore (MAS) announced three initiatives aimed at enhancing Singapore's competitiveness as a global asset management hub. The measures build on recent refinements to Singapore's fund tax incentive framework and are intended to attract investment capital, talent and asset management activities to Singapore.

MAS announced the following initiatives:

• A proposed tax exemption for qualifying profit-related returns arising from the provision of fund management services to Singapore-based qualifying funds that satisfy existing economic substance requirements

• A new hedge fund investment programme to encourage hedge fund managers to establish or expand their operations in Singapore and support the broader investment ecosystem

• A new investment management track under the Overseas Networks & Expertise (ONE) Pass framework, including refinements to salary assessment that may take into account performance-linked compensation arrangements commonly used within the asset management industry

The initiatives are expected to take effect from 2027, with further implementation details expected to be announced during Budget 2027.

IRAS clarifies withholding tax treatment for leveraged deposit arrangements

In Q3 2026, IRAS has updated its Frequently Asked Questions (FAQs) on payments subject to withholding tax, providing clarification on the treatment of interest payments made by Singapore-resident individuals to overseas banks under leveraged deposit arrangements.

In its updated FAQs, IRAS considered a scenario where a Singapore-resident individual obtains a loan from an overseas bank and invests the borrowed funds in a leveraged fixed deposit arrangement. IRAS clarified that interest payable to the overseas bank may be subject to Singapore withholding tax, even where the borrowed funds are used to generate foreign-sourced investment income.

The withholding tax obligation may also arise where interest is deemed to have been paid, notwithstanding that no actual payment is made to the lender. This includes situations where the interest is reinvested, accumulated, capitalised, credited to an account or otherwise dealt with on behalf of the lender. This position is based on section 12(6) of the Income Tax Act, which deems interest to be derived from Singapore where the interest is borne, directly or indirectly, by a Singapore-resident person. Accordingly, interest paid by a Singapore-resident individual to a non-resident bank is generally deemed to be derived from Singapore and may be subject to withholding tax, subject to any applicable exemption or treaty relief.

IRAS further clarified that withholding tax does not apply where the interest is paid to a Singapore branch of a non-resident bank, as the branch is required to report the income in its Singapore tax return.

Key takeaway

The MAS initiatives reinforce Singapore's efforts to attract asset and wealth management activities, while the IRAS clarification provides greater clarity on the withholding tax treatment of cross-border financing arrangements. The clarification also highlights the practical distinction between payments made to overseas lenders and payments made to Singapore branches of non-resident banks for withholding tax purposes. Fund managers, investors and financial institutions should monitor further developments and assess any potential tax implications arising from these changes.

Xue Pei Chan, Partner, Tax, Singapore

________________________________________

Sources used

[1] Monetary Authority of Singapore, MAS announces measures to strengthen Singapore's position as a global asset management and wealth management hub, 19 August 2026.

[2] Inland Revenue Authority of Singapore, Payments that are Subject to Withholding Tax – FAQ for Interest Payments.

Italian PEs under scrutiny: certified date requirement for the profit-and-loss and balance sheet statement takes effect

Article 19 of Legislative Decree No. 148 of 7 August 2026 (the so-called “Decreto Omnibus”) amends Article 152(1) of the Italian Income Tax Code (TUIR)^[1], providing that the profit-and-loss and balance sheet statement (“rendiconto economico patrimoniale”) of Italian Permanent Establishments must now bear a certified date. Moreover, the data contained in the statement must also be reported in a dedicated form of the Annual CIT return.

Background

The provision implements the tax reform enabling act (Article 17, Law No. 111/2023), which aims to reduce tax evasion and avoidance through greater use of digital technologies and interoperability between databases. Its purpose is to make the accounting documentation of Permanent Establishments (PEs) more reliable, to enable faster and more effective audit activity by the Italian tax authorities and to level the playing field with resident companies. The substantive rules for determining a permanent establishment’s taxable income remain unchanged; the amendment introduces new formal obligations intended to give authenticity and temporal certainty to the profit-and-loss and balance sheet statement.

Certified date required for the PE’s Statement

The recent legislative amendment provides that the profit-and-loss and balance sheet statement (“rendiconto economico patrimoniale”) of Italian PEs must now bear a certified date, obtained through validation with a digital time stamp or another instrument recognised as valid for this purpose under the law.

This new tax compliance requirement must be fulfilled by the deadline for filing the relevant annual CIT return[1] .

Specifically, Italian PEs of foreign banks will be required to time-stamp their profit-and-loss and balance sheet statement, drafted, where applicable, under the format provided by Circular No. 262/2005 of Bank of Italy, within the deadline for the submission of the annual CIT return.

Disclosure in the annual CIT return

Moreover, the summarised data contained in the PE’s profit-and-loss and balance sheet statement (duly time-stamped) will be reported in a dedicated section of the annual CIT return.

Therefore, although Italian PEs’ statements are not mandatory subject to publication, their inclusion in the annual CIT return will provide authenticity and temporal certainty to the Italian Tax Authorities.

The Italian Revenue Agency will specify how the profit-and-loss and balance sheet statement (“rendiconto economico patrimoniale”) must be reported in the official instructions for the 2027 annual CIT return, covering FY2026.

However, for Italian PEs of foreign banks, it is expected that the summarised figures from the profit-and-loss and balance sheet statement will be reported in the annual CIT return using the official format prescribed by Bank of Italy Circular No. 262/2005, as several such PEs already do.[2] 

Effective date

The new provisions will enter into force from the fiscal year in progress on 31 December 2026. Therefore, for taxpayers whose fiscal year coincides with the calendar year, these newly introduced obligations will apply starting with the annual CIT return for FY2026, to be filed in 2027.

Emanuele Amati, Matteo Ceccarelli

Matteo Ceccarelli (Senior Manager)

Carlotta Padua (Manager)

^[1] As from 1 January 2027, the relevant statutory reference will be Article 150 of the new Italian Income Tax Code, Legislative Decree No. 117/2026.

Upcoming budget presentation could see bank levies or surcharges targeted in attempt to maintain corporation tax rates

The new Chancellor of the Exchequer, John Healey, presents his first Budget on 28 October 2026. Constrained by Labour's commitment to maintain the main rate of corporation tax at 25%, and with fiscal headroom under pressure, he must look elsewhere for revenue. Banks remain profitable and may therefore prove tempting targets.

One option would be to increase the bank surcharge from its current rate of 3%, or to reduce the £100 million surcharge allowance. An increase in bank surcharge could take effect from 1 April 2027, if past legislative practice were followed. A rise in bank levy appears less likely. If the objective is to raise revenue from profitable banks, increasing the bank surcharge may be the simpler and more politically visible tool.

Banks with a large retail footprint will also wish to watch for changes to business rates. Reforms could aim to "level the playing field" between high-street businesses and online operators. However, if the reforms are intended to be revenue-neutral, any benefit for smaller businesses could simply shift the burden onto larger occupiers.

These comments remain speculative. The real outcome will be revealed on 28 October.

Ian Thomson, Associate Director, Forvis Mazars