Which Global Tax Changes in 2026 Affect My U.S. Business?

International tax reporting has a particular failure mode: everything looks quiet until a registration deadline in a jurisdiction you barely think about has already passed. The global tax changes below are drawn from developments through late August 2026, filtered down to what actually reaches a U.S. company of ordinary size with cross-border connections.

We advise companies operating between the United States and Korea, and our partners hold both the California CPA and the Korean CPA (KICPA) credentials. That vantage point shapes what we flag here — less about the largest multinationals, more about the mid-sized group with a parent in one country and an operating company in another.

What do the proposed U.S. rules mean for a subsidiary of a foreign parent? 🌐

They would change how foreign taxes are allocated when a controlled foreign corporation’s tax year shifts, and they would disallow 10% of certain foreign tax credits on distributions of previously taxed earnings. Comments are due September 17, 2026.

Treasury released proposed regulations on the allocation of certain foreign income taxes for specified foreign corporations affected by the repeal of a provision that let such a corporation elect a taxable year beginning one month earlier than its majority U.S. shareholder’s year. That one-month election was a long-standing administrative convenience, and unwinding it creates a genuine allocation problem: taxes accrued in a period that no longer lines up have to land somewhere.

The same package would implement a 10% disallowance of certain foreign tax credits with respect to taxes paid, accrued or deemed paid on distributions of certain previously taxed earnings and profits. Proposed rules and comment deadlines are published in the Federal Register, and IRS announcements appear in the IRS newsroom.

Where is Pillar Two actually landing in 2026? 🏛️

In registration portals and filing deadlines, jurisdiction by jurisdiction. The framework stopped being a policy debate some time ago and is now an administrative calendar.

Through 2026, implementation moved on several fronts at once. Germany’s government approved a draft annual tax act including key elements of the side-by-side package. The United Arab Emirates’ tax authority issued registration and deregistration deadlines for top-up tax purposes. Qatar opened a Pillar Two registration service on its tax platform. Cyprus published forms and compliance procedures. France extended the first filing deadline for the global information return. Indonesia issued an administrative framework for compliance and reporting, and Thailand moved toward international exchange of the information return.

Framework documents and country implementation status are published by the OECD. The pattern worth noticing is that registration deadlines are arriving before filing deadlines, and registration is where groups get caught — it is administrative, it is easy to delegate to nobody, and missing it does not feel like a tax failure until a penalty arrives.

A side-by-side arrangement for U.S. groups changes the character of the work rather than removing it. If your group has an affiliate in an implementing jurisdiction, someone still has to register, gather the data and file locally, on that jurisdiction’s calendar.

Is mandatory e-invoicing about to reach my operations? 🧾

If you operate in Europe, probably. Belgium is moving to near-real-time electronic reporting of invoicing data, and Luxembourg has a draft bill making e-invoicing mandatory for domestic business-to-business transactions from 2028.

E-invoicing mandates are mislabeled as tax projects. They are systems projects with a tax deadline attached. The tax analysis is usually straightforward; the work is in your invoicing software, your master data quality, and whether your entity’s customer and supplier records can produce a structured invoice that a government platform will accept on the first attempt.

That is why a 2028 date is a 2026 or 2027 decision. Software selection, data cleanup and a parallel-run period consume most of the runway. Groups that treat the mandate as a compliance item to be handled in the final quarter before it applies generally end up filing manually and expensively for the first year.

How much transfer pricing scrutiny should we expect? 🔍

More, and increasingly delivered through formal programs rather than ad hoc audits. Several revenue authorities expanded structured transfer pricing regimes during 2026.

The United Kingdom expanded its transfer pricing and profit diversion compliance facility and launched an advance tax certainty service. New Zealand’s revenue authority signalled continued intensification of transfer pricing scrutiny. Malaysia issued transfer pricing guidelines specifically addressing intragroup loans. South Africa finalized advance pricing agreement rules as its pilot program went live, and Malta published transfer pricing disclosure requirements in corporate income tax returns.

For a mid-sized group the exposure is rarely exotic. It is two line items: intragroup loans priced at a rate nobody can defend, and management or service fees charged without a written agreement or a demonstrable benefit test. Both are easy to document before an inquiry and expensive to reconstruct after one.

What should a Korean parent company be watching? 🇰🇷

Korea’s Ministry of Economy and Finance announced a proposed 2026 Tax Revision Bill in August 2026. The specifics still move through the National Assembly, so track it rather than plan on any single provision.

The announced bill is organized around four stated aims: supporting a rebound in Korea’s potential growth beyond the current semiconductor-driven recovery; expanding support for ordinary citizens, middle-income households and young people while promoting regional development; advancing tax reform toward fairer taxation; and rationalizing the system to improve taxpayer convenience. Those are directional statements, and the operative details are what will matter once the bill is through the legislature.

For a Korean group with a U.S. subsidiary, the more urgent item this quarter is on the U.S. side — the proposed foreign tax credit and controlled foreign corporation rules described above. We cover the U.S. entry structure itself separately in our guide to setting up a U.S. subsidiary for a Korean company, and you can read more about how we work in both languages on our Korean-speaking CPA page.

One further item worth flagging for cross-border families rather than companies: China’s finance ministry and tax administration issued bulletins on individual income tax treatment of offshore trusts, together with a 90-day window during which taxpayers may voluntarily declare and settle certain unpaid taxes on existing trusts without a late payment surcharge. Voluntary windows of that kind are short and are not usually repeated.

Frequently asked questions ❓

Q. Which global tax changes matter most to a U.S. company with a foreign parent?

The proposed U.S. regulations on foreign tax credits are the most immediate. Treasury released proposed rules addressing the allocation of certain foreign income taxes for specified foreign corporations affected by the repeal of the election to use a taxable year beginning one month earlier than the majority U.S. shareholder’s year. The same package would implement a 10% disallowance of certain foreign tax credits on distributions of previously taxed earnings and profits arising from global intangible low-taxed income. Comments and hearing requests are due by September 17, 2026.

Q. What is the 10% foreign tax credit disallowance on previously taxed earnings?

In outline, when previously taxed earnings and profits attributable to global intangible low-taxed income are distributed, the proposed rules would disallow 10% of the foreign taxes paid, accrued or deemed paid with respect to that distribution. Because previously taxed earnings are, by definition, earnings already subjected to U.S. tax, a disallowance on the related foreign taxes reduces the relief that the previously taxed earnings regime was designed to provide. Groups planning repatriations should model the effect before the rules are finalized.

Q. Do I still need to worry about Pillar Two if the United States negotiated side-by-side treatment?

Yes, if you have operations or affiliates in jurisdictions that have implemented it. Through 2026, jurisdictions including Germany moved implementing legislation, and tax authorities in the United Arab Emirates and Qatar opened registration and set deadlines for top-up tax purposes. A side-by-side arrangement changes the character of the work rather than eliminating it: registration, data collection and filing obligations still fall due locally, on local deadlines.

Q. Is mandatory e-invoicing coming to the countries we operate in?

It is spreading steadily across Europe. Belgium has moved toward near-real-time electronic reporting of invoicing data, and Luxembourg submitted a draft bill that would make e-invoicing mandatory for domestic business-to-business transactions from 2028. E-invoicing mandates are systems projects rather than tax projects — the lead time sits with your accounting software and your master data, so a 2028 date is a 2026 or 2027 decision.

Q. How much transfer pricing scrutiny should a mid-sized group expect?

More than in prior years, and increasingly through formal programs rather than ad hoc audits. In 2026 the United Kingdom expanded its transfer pricing and profit diversion compliance facility and launched an advance tax certainty service, New Zealand’s revenue authority signalled intensified transfer pricing scrutiny, Malaysia issued guidelines on intragroup loans, and South Africa finalized advance pricing agreement rules as its pilot went live. Intragroup loans and management fees are the two items most often unsupported in mid-sized groups.

Q. What should a Korean parent company be watching in 2026?

Korea’s Ministry of Economy and Finance announced its proposed 2026 Tax Revision Bill, organized around supporting growth beyond the semiconductor-led recovery, expanding support for ordinary and middle-income households and young people alongside regional development, advancing fair taxation, and rationalizing the system to improve taxpayer convenience. The specifics move through the National Assembly, so the sensible posture is to track the bill rather than plan on any single provision. On the U.S. side, the proposed foreign tax credit and controlled foreign corporation rules above are the more urgent item for a Korean group with a U.S. subsidiary.

Cross-border exposure depends on your ownership chain, where your people sit and how money moves between entities. If you would like us to review yours, contact SW Accounting & Consulting Corp — a Los Angeles CPA firm working in English and Korean across both tax systems.