Cloud access is a service in New Zealand, and may be a royalty in Australia.

A bill would replace the existing Cyprus domestic minimum top-up tax with a qualified version from 2026, after concerns raised by the OECD and the European Commission. Foreign CFC taxes could not be allocated to Cyprus entities.

A draft law would make the 2025 calendar year domestic top-up tax return due on 31 March 2027 rather than 30 November 2026. Until it passes, plan for 30 November.

The Court of Justice held that dividend withholding tax may apply where an EU parent with real activity takes part in a partly or wholly non-genuine chain set up mainly to obtain a tax advantage.

New Zealand draft guidance treats SaaS, PaaS and IaaS as services, not royalties. Under TR 2026/2 the ATO considers cloud access can be a communication to the public, giving a royalty.

The Cyprus Ministry of Finance has tabled a bill dated 8 October 2026 to amend Law 151(I)/2024. It would introduce a qualified domestic minimum top-up tax (QDMTT) from the 2026 fiscal year in a new article 12A, and keep the existing Cyprus domestic minimum top-up tax for 2025 only. The explanatory memorandum says the change follows concerns raised by the OECD and the European Commission about whether the current tax qualifies. The new charge would not allow foreign CFC taxes to be allocated to Cyprus entities, would exclude certain taxes allocated to Cyprus permanent establishments, and would recognise owner-level taxes on hybrid entities only where imposed in Cyprus. EU-endorsed IFRS would apply where all Cyprus entities prepare audited or legally required IFRS accounts. The calculation would be in euros where all Cyprus entities have a euro functional currency, and otherwise there would be a renewable five-year election for euros or the group's presentation currency. In Kenya, the Income Tax (Minimum Top-Up Tax) Regulations 2026 (Legal Notice No. 189, made available on 18 September 2026) set out how the minimum top-up tax under section 12G of the Income Tax Act is calculated. They broadly follow the GloBE rules, including the substance-based income exclusion, the transitional CbCR safe harbour, notification of status and filing of a minimum top-up tax return and a GloBE information return. The Regulations are awaiting publication in the Gazette and will be tabled in the National Assembly.

It would be sensible to model the 2026 Cyprus position under the proposed rules now, since they would apply to the current year. Excluding foreign CFC taxes is consistent with the OECD conditions for a qualified domestic top-up tax, but it may mean Cyprus top-up tax is payable even where CFC tax paid by the parent, including Australian CFC tax on attributed income, brings the overall rate to 15 per cent. Groups whose parent applies an income inclusion rule may also wish to consider how the 2025 Cyprus tax is treated, given the concerns about its qualified status. Groups with Kenyan operations may wish to add the Kenyan notification and returns to their timetable once the Regulations are gazetted, and to run the transitional CbCR safe harbour tests for Kenya specifically.

A Belgian draft law now before Parliament would move the domestic top-up tax return deadline from 11 months to 15 months after year end, with 18 months for a first fiscal year starting no later than 31 December 2024. For a calendar year group, the 2025 return would be due on 31 March 2027 rather than 30 November 2026. The same draft law transposes DAC9, the directive that allows the GloBE information return to be filed centrally and exchanged within the EU. The tax administration is expected to apply the new deadline in practice, if necessary by administrative tolerance, before the law is adopted. Separately, on 9 October 2026 the Council of Ministers approved a draft law to implement the Multilateral Competent Authority Agreement on the Exchange of GloBE Information, which covers exchange with jurisdictions outside the EU. It now goes to Parliament. In the UAE, the Federal Tax Authority announced on 7 October 2026 points from its top-up tax scope and registration guide. Groups operating only in the UAE are outside the domestic top-up tax whatever their revenue. An in-scope entity must register for top-up tax even if it is already registered for corporate tax, and the Authority may register an entity on its own initiative, backdated to when registration was due. A UAE entity acquired by an in-scope group has seven months from the end of the first in-scope fiscal year to register. The application must identify the ultimate parent and any foreign designated filing entity and include a group structure overview.

Until the law is passed, or the administration confirms the tolerance in published guidance, it would be sensible to plan to file the Belgian 2025 return by 30 November 2026, and to check whether any payment date moves with the return date. UAE entities of in-scope groups with fiscal years ending before 30 April 2026 may wish to confirm they are registered before 30 November 2026. For entities acquired in 2026, it would be sensible to note the seven-month deadline, since the Authority may otherwise register the entity with effect from the date registration was due.

In Neo (C-203/25), decided on 15 October 2026 on a reference from Lithuania, the Court of Justice held that the Parent-Subsidiary Directive does not prevent a Member State from levying withholding tax on dividends paid to an EU parent that carries on a real economic activity and is not a conduit, where the parent takes part in a chain of transactions, some or all of them not genuine, through which the dividends reach the person who controls the companies involved. Relevant indications of a non-genuine arrangement include onward transfers similar or identical in amount to the dividends, made on a continuous basis over a period rather than immediately after the distribution. The tax authority must still make an objective analysis of all the facts, and the chain must have as a main purpose obtaining a tax advantage that defeats the object of the Directive. The Member State may levy the tax even where the non-genuine steps take place outside its territory, and without showing that the paying subsidiary knew of the chain, provided at least one group company in the chain, or the person who benefits, was or could have been aware of it.

The decision indicates that substance in the immediate EU parent may not be enough on its own, and that tax authorities may also look at how dividends are used after they are received. This may be relevant for Australian groups holding EU subsidiaries through an EU holding company, since the Australian parent could not claim the Directive exemption directly. It would be sensible to review how the holding company uses the dividends it receives, particularly recurring intra-group loans or payments similar in amount to the dividends, and to record the commercial reason for each flow.

Inland Revenue's draft interpretation guideline PUB00266, which would replace IG0007 on payments to non-resident software suppliers, is open for comment until 31 October 2026. The draft classifies each arrangement by the legal rights actually granted rather than the contract label. Software as a service, platform as a service and infrastructure as a service are generally treated as services, not royalties, because they provide on-demand access without a transfer of copyright rights. Basic resellers that buy and on-sell cloud access are treated as service transactions even where they use the provider's trade marks. A royalty arises only for a distinct and material copyright or know-how component, which is apportioned and subject to 15 per cent non-resident withholding tax, reduced under the relevant treaty.

This differs from TR 2026/2, issued on 4 September 2026, under which the ATO considers that providing cloud access can be a communication to the public under Australian copyright law, so that many SaaS and reseller arrangements may involve a royalty. Groups that run the same cloud or reseller model through Australian and New Zealand subsidiaries may therefore reach different withholding outcomes for similar payments. The Australian exposure may go back to 1 July 2021, although TR 2026/2 does not deal with payments to residents of the United States, the Netherlands, Italy, Singapore or Mexico, which need a treaty-specific analysis. It would be sensible to document the Australian analysis separately rather than rely on a combined trans-Tasman position, and to consider whether to make a submission on the New Zealand draft before 31 October.

The Treasury Laws Amendment (Tax Reform No 3) Bill 2026 and the Income Tax Rates Amendment (Minimum Tax on Discretionary Trusts) Bill 2026 were introduced this week, following the Treasurer's release of 14 October 2026. Schedule 1 imposes a 30 per cent minimum tax, payable by the trustee, on the net income of discretionary trusts for income years starting on or after 1 July 2028. It tops up tax already paid by the trustee to 30 per cent and does not apply to amounts subject to non-resident withholding tax. Fixed trusts, including managed investment trusts (MITs) and attribution MITs (AMITs), are outside it, and the definition of fixed trust is amended so that a trust with no material discretionary elements qualifies. Schedule 2 provides a three-year roll-over from 1 July 2027 for restructuring out of an affected trust, and Schedule 3 allows an election to become an excluded election trust by nominating beneficiaries' shares. Schedule 4 is the second tranche of the change from the CGT discount to indexation, applying from the income year that includes 1 July 2027. Among other things, it extends the reforms to AMITs, allows revenue treatment for MIT assets acquired on or after 1 July 2027, and pro-rates the discount and indexation for foreign and temporary residents who make capital gains directly, by the number of days they were Australian residents.

The direct effect on inbound corporate groups may be limited, since the CGT changes apply to individuals, trusts and partnerships rather than companies, and amounts subject to non-resident withholding tax are excluded from the minimum tax. Foreign investors in Australian MITs and AMITs may wish to review the AMIT rules and the option of revenue treatment for MIT assets acquired on or after 1 July 2027, which could change the character of fund payments. Groups with private Australian structures that include discretionary trusts may wish to consider the roll-over and the election, if the bills pass in their current form; the roll-over period starts on 1 July 2027.

Pereira Consulting is an independent tax advisory practice founded by Neil Pereira, advising multinational groups operating into and out of Australia on international tax, Pillar Two readiness, transfer pricing, anti-avoidance, ATO disputes and corporate income tax compliance. Neil is a Chartered Tax Adviser, Registered Tax Agent and Solicitor.

Disclaimer. This newsletter is general information only and does not constitute tax or legal advice. It is current as at the issue date. Pereira Consulting accepts no liability for any decision made in reliance on its contents. Please contact Neil Pereira to discuss the application of these developments to your specific circumstances.