The ETL GLOBAL Tax Update is a series designed to provide critical insights into recent developments in international taxation. It is presented by the ETL GLOBAL Tax Working Group, a closely interconnected team of international tax experts within the ETL GLOBAL network. The group’s objective is to share their collective expertise on tax matters and ensure that their joint business clients are well-informed about the latest tax regulations and legislative changes worldwide.
This edition of the ETL GLOBAL Tax Update highlights recent and upcoming tax developments in France, Italy, Portugal and Hungary with insights from the Tax Working Group’s leader Till Jouaux and his fellow tax experts Marco Nardini, Fátima Gouveia and Dániel Takó.
🇫🇷 France – Till Jouaux, In Extenso
Exceptional Contribution on the Profits of Large Companies:
This new contribution applies to companies subject to corporate income tax with turnover exceeding €1 billion (20.6% surcharge) and €3 billion (41.2% surcharge). This results in effective corporate tax rates of approximately 31% and 36%, respectively, compared to a standard rate of 25%.
Note: the turnover used to assess whether the threshold has been exceeded pertains solely to profits subject to corporate income tax in France. This exceptional contribution is supposed to be temporary and only applies to the financial year ending December 31, 2025, or later in the case of a non-calendar fiscal year.
New Tax on Capital Reductions through Share Buybacks:
This tax applies to companies whose registered office is located in France, and which have also generated revenue in excess of €1 billion. It applies to the amount of sums paid to shareholders following the repurchase by the company of its own shares, with a view to canceling them and reducing the amount of share capital, thereby enabling a transfer of cash. The rate of this new tax is 8%.
Global Minimum Tax of 15% – Implementation of Pillar 2:
France recently transposed the European directive aimed at ensuring a minimum level of global taxation for multinational enterprise groups and large domestic groups in the EU, to incorporate the rules of the OECD’s Pillar 2. The aim of these new rules is to achieve a global minimum tax rate of 15%.
An additional contribution now applies to companies located in France that belong to a group of companies with consolidated turnover of €750 million or more if the group’s effective tax rate is less than 15%.
Electronic Invoicing:
From September 1, 2026, companies established in France will have to receive their invoices in electronic format. They will also have to gradually issue them in the same format, from September 1, 2026, for large and medium-sized companies, and from September 1, 2027, for small and medium-sized companies and micro-enterprises.
In this context, electronic invoices must be transmitted via a platform approved by the State for all transactions between companies established in France and subject to VAT.
Differential Contribution on High Incomes:
A one-off contribution aimed at guaranteeing a minimum tax rate of 20% on the income of individuals has been introduced for income earned in 2025. This differential contribution comes in addition to income tax and applies to households with a reference taxable income of more than €250,000 for single, widowed, separated, or divorced individuals and €500,000 for married or civil union couples who are jointly taxed.
A deposit equal to 95% of the estimated contribution must be paid between December 1 and December 15, 2025.
Tax Reform of “Management Packages”:
Since February 2025, a new hybrid regime provides for the taxation of gains realized on financial instruments held by employees/executives (e.g., stock options, BSPCEs). The gain generated by management packages must now be broken down into:
- a portion corresponding to a “real” capital gain (Art. 150-0 A of the French General Tax Code), within the limits of a calculation that determines what such an investment should “normally” yield, taxed under the capital gains regime (flat 30% tax including social charges),
- a portion corresponding to remuneration for work, for the excess portion, taxed in the category of wages and salaries (up to 60%).
The threshold is calculated regarding the performance of the gain, by a multiple of three times the financial performance of the company over the period considered.
Note: Securities covered by the new regime can no longer be included in share savings plans (PEA), which impacts the possibilities for employee and executive profit-sharing.
🇮🇹 Italy – Marco Nardini, NexumStp
“Incentive” Corporate Income Tax (IRES) at 20% + enhanced hiring deduction:
For 2025, a reduction of the CIT rate from 24% to 20% is provided under certain conditions (linked to profit reinvestment/growth parameters).
In addition, the enhanced deduction for new permanent hires (increased deductibility of personnel costs) has been extended for the period 2025-2027.
Flat tax for “new wealthy residents”:
For individuals transferring their tax residence to Italy, a substitute flat tax on foreign-source income of €200.000 per year is provided (until 10.08.2024 it was €100.000, and it will further increase to €300.000 starting from 2026); duration up to 15 years; extendable to family members at €25.000 each (€50.000 from 2026); Italian-source income remains taxed under ordinary rules.
Taxation of Crypto assets:
In 2025, capital gains are subject to a 26% substitute tax; the €2.000 exemption has been abolished. Amendments in force provide for an increase in the rate to 33% starting 1 January 2026. It is possible to revalue crypto-asset holdings as of 1 January 2025 by paying a substitute tax of 18% by 30 November 2025.
Implementation of BEPS Pillar 2 (Global Minimum Tax):
Italy has transposed and made operational the EU rules on the global minimum tax under Directive (EU) 2022/2523 at the end of 2023 and, with subsequent 2024 MEF decrees, has regulated QDMTT and Safe Harbours. Gradual entry into force during 2024-2025-2026.
2026 Budget Law (currently still under discussion):
The draft of the 2026 Budget Law provides for the reintroduction of a new « hyper-depreciation » for the purchase of certain fixed assets, interconnected with the company’s production management system or aimed at self-production of energy, with an increase in the tax-deductible depreciation varying up to 220% of the cost.
The draft of the new Budget Law also provides for a possible reduction in the second IRPEF bracket (income range between €28,000 and €50,000), whose rate would decrease from 35% to 33%.
🇵🇹 Portugal – Fátima Gouveia, Comark Global
Pillar 2 implementation:
Directive (EU) 2022/2523 of 15 December 2022 was transposed to Portuguese legislation through Law 41/2024, of November 8. The law implements the Global Minimum Tax Regime, introducing a global minimum tax of 15% for big multinational and domestic groups.
International tax treaties:
The tax treaties with Sweden and Finland were terminated as per 01.01.2022 and 01.01.2019 respectively. There are no signs for now about their reinstatement.
E-invoicing
E-invoicing is mandatory for B2G transactions. In the case of SMEs as of 2026, digital qualified electronic signature will become mandatory in 2026. Nevertheless, this requirement has been successively postponed since 2020. For that reason, we are waiting for the 2026 National Budget to know if this will be implemented.
🇭🇺 Hungary – Dániel Takó, ABT Treuhand
Pillar 2 introductions: The first tax year requiring the calculation of the Qualified Domestic Minimum Top-up Tax (QDMTT) is coming.
The so-called extra profit tax for credit institutions and financial enterprises is being modified, with increased rates.
The retail tax rate for retailers will remain high, with progressive rates based on sales thresholds).
Excise duties and local taxes will be indexed to the inflation rate of the previous year, starting in 2026.
PIT allowances for families have been doubled during the year.
Tips for employees are tax-exempt.
Personal Income Tax (PIT) exemptions for mothers with two and three children are now being applied, while mothers with four children have been fully exempt from PIT for some time.
The cap on the R&D Corporate income tax allowance has been raised from HUF 50 million to HUF 150 million.
Private individuals renting out Airbnb and similar apartments are subject to additional tax rates within the city limits of Budapest.
Electronic receipts are being introduced for retail shopping. Customers will receive an e-receipt for the purchases through a dedicated app provided by the tax authority. E-invoicing has been in use for years and operates reliably.
The 5% VAT rate for newly built apartments remains in effect until the end of 2026. If the building permit was issued by 31 December 2026, this rate can be applied until 2030.
Indirect customs representatives face stricter rules: they are required to conduct partner verification, and indirect customs representation cannot be granted to companies that file VAT quarterly or are classified as “risky” by the tax authority.
The advertisement (digital) tax rate of 0% will be kept until 30 June 2026.
The threshold for mandatory audits of accounting balance sheets has been raised from HUF 300 million to HUF 600 million for 2025.
Income from crypto transactions:
Previously, taxpayers had to consider all income and expenses within a given tax year to determine profit or loss and could only offset losses from the previous two years.
From 2026, this two-year limit will be abolished, and the tax offset will become unlimited. Accordingly, losses incurred in previous years, in the period preceding the two years, and not yet recognized during the tax offset can also be used to reduce the tax on current-year transaction profits.
