December 2025 Monthly Tax Briefing

December's Monthly Tax Briefing covers recent developments in tax legislation, including:

1. OECD Model Tax Convention – Update 2025
2. Circular E.2110/2025 on the EU Carbon Border Adjustment Mechanism (CBAM)

A. OECD Model Tax Convention – Update 2025

1. On 5 January 2026 the OECD released the Side-by-Side (SbS) package (the Package) providing additional guidance on the Global Anti-Base Erosion Model Rules (GloBE Rules).

2. In summary, the Package includes the following main provisions:

1. A simplified Effective Tax Rate (ETR) Safe Harbor applicable as of 1 January 2027.
2. Extension of the transitional CbCR Safe Harbor by one year.
3. Introduction of the SbS system as of 1 January 2026. The introduction of the SbS system will be effected by way of safe harbors and can exempt an entire Group from the IIR and the UTPR or only the Ultimate Parent Entity jurisdiction.