International tax update — Sept 27, 2026
What changed this week
| Development | Who it affects |
|---|---|
| Australia opens consultation on major R&D Tax Incentive reforms | US-headquartered groups with an Australian R&D subsidiary or contract R&D relationship; life sciences, biotech and medical technology companies running clinical work in Australia; and Australian-parented groups that flow R&D benefits up to US owners. |
| Hong Kong’s 2026 Policy Address sets out new tax-related measures | US-headquartered groups with a Hong Kong operating subsidiary, holding company or IP-owning entity; families using Hong Kong for non-residential real estate transfers; and any multinational group already assessing Pillar Two exposure in Hong Kong. |
| OECD publishes its 2026 Tax Policy Reforms report covering 92 jurisdictions | US-headquartered groups with foreign subsidiaries, joint ventures or significant cross-border payments; family offices with global holdings; and any owner budgeting cross-border pricing or expatriate compensation for 2027. |
Australia opens consultation on major R&D Tax Incentive reforms
Australia’s Treasury has released an exposure draft of legislation to reform the Research and Development Tax Incentive (RDTI), following measures announced in the 2026-27 Federal Budget. As drafted, the reforms would apply to income years starting on or after 1 July 2028. Headline changes include higher offsets for core R&D activities; the removal of eligibility for supporting R&D activities; lower intensity thresholds; a lift in the turnover cap to AUD 50 million; adjustments to expenditure limits; and extended refundability periods of up to 15 years for biotech and medical technology companies. The consultation also asks specifically whether clinical manufacturing R&D expenditures should qualify. Public comments closed on 28 September 2026.
Who it affects: US-headquartered groups with an Australian R&D subsidiary or contract R&D relationship; life sciences, biotech and medical technology companies running clinical work in Australia; and Australian-parented groups that flow R&D benefits up to US owners.
What to do
Read the exposure draft with your Australian tax counsel before finalizing FY 2028 R&D budgets. Test how the loss of “supporting R&D activities” eligibility, the higher AUD 50 million turnover cap and the biotech-specific refundability extension would change your Australian RDTI claim if applied to your current spend. If clinical manufacturing is material to your model, monitor how Treasury resolves that question in the final bill.
Primary source: Australia Treasury consultation — Better targeting the Research and Development Tax Incentive (exposure draft)
Hong Kong’s 2026 Policy Address sets out new tax-related measures
The Chief Executive of Hong Kong delivered the 2026 Policy Address, outlining a package of tax-related initiatives aimed at attracting investment, supporting economic competitiveness and helping families. Reported measures include tax deductions for intellectual property and a stamp duty waiver for certain transfers of non-residential property. The Policy Address also sits alongside Hong Kong’s ongoing Pillar Two implementation, which is now moving into practical filing considerations for in-scope groups. For US owners with a Hong Kong operating company or holding entity, the direction of travel is a mix of targeted investment sweeteners on one hand and top-up tax exposure under the global minimum tax on the other.
Who it affects: US-headquartered groups with a Hong Kong operating subsidiary, holding company or IP-owning entity; families using Hong Kong for non-residential real estate transfers; and any multinational group already assessing Pillar Two exposure in Hong Kong.
What to do
Ask your Hong Kong advisor for a short memo on which Policy Address measures apply to your entity — in particular, whether your IP holdings can benefit from the new deduction and whether any planned non-residential property transfer falls inside the stamp duty waiver. In parallel, refresh your Pillar Two exposure analysis for the Hong Kong entity so the tax incentives are read alongside any top-up tax you might owe.
Primary source: The Chief Executive’s 2026 Policy Address (policyaddress.gov.hk)
OECD publishes its 2026 Tax Policy Reforms report covering 92 jurisdictions
The OECD has released the 2026 edition of Tax Policy Reforms, its annual comparative report on tax policy across the members of the OECD/G20 Inclusive Framework on BEPS. This year’s edition covers reforms introduced or announced during calendar year 2025 across 92 jurisdictions, tracking how governments moved on corporate tax, personal tax, VAT and consumption taxes, environmental taxes and other levers. For US owners with cross-border payments, foreign subsidiaries or supply chains, the report is the cleanest single view of which of your counterparties’ countries are tightening, which are loosening and where minimum tax rules are landing.
Who it affects: US-headquartered groups with foreign subsidiaries, joint ventures or significant cross-border payments; family offices with global holdings; and any owner budgeting cross-border pricing or expatriate compensation for 2027.
What to do
Use the country annexes to build a one-page map of the jurisdictions that touch your group and note any 2025 reforms that would change your 2026 or 2027 planning — corporate rate moves, base changes, VAT reforms and minimum tax adoption in particular. Feed that map into your Pillar Two impact analysis and into next year’s transfer pricing review.
Primary source: OECD — Tax Policy Reforms 2026 report
What this means for your business
- Australia’s R&D reforms would reshape offsets and eligibility from mid-2028 — model the impact on your Australian R&D claim before you finalize the FY 2028 budget.
- Hong Kong’s 2026 Policy Address bundles new incentives with continuing Pillar Two work — read the sweeteners and the top-up tax exposure together, not separately.
- The OECD’s 2026 report gives you a single view of what 92 jurisdictions changed in 2025 — use it as the map for your 2027 cross-border planning.
- None of this changes your US filings this quarter, but each one changes how you set next year’s cross-border numbers.
This week in one line
Australia has opened consultation on major changes to its R&D Tax Incentive, Hong Kong has laid out new tax measures in the 2026 Policy Address, and the OECD has published its annual comparative report on tax reforms across 92 jurisdictions — three signals for anyone planning cross-border operations into 2027.
Frequently asked questions
Q. If Australia’s R&D reforms only start from mid-2028, why should I care now?
Because your FY 2028 R&D budget and staffing decisions are being set today. The exposure draft would remove “supporting R&D activities” from eligibility, lift the turnover cap to AUD 50 million and extend refundability up to 15 years for biotech and medtech. If your current claim depends on activities that would fall outside the new definition, you have time to restructure the program before the rules bind — but only if you model the impact now.
Q. Do the Hong Kong Policy Address measures interact with Pillar Two?
Yes. Tax deductions and stamp duty waivers can reduce your Hong Kong effective tax rate, and a lower effective rate can pull an in-scope multinational deeper into the global minimum tax’s top-up mechanics. Read any new Hong Kong incentive alongside your Pillar Two exposure analysis rather than treating them as separate memos.
Q. The OECD report covers 92 jurisdictions — how do I use it if I only operate in a few?
Pull the country annexes for the jurisdictions that actually touch your group — where your subsidiaries sit, where you have significant cross-border payments, and where your top vendors and customers file. Build a short one-page map of the 2025 reforms in those places and use it as the input to your 2027 planning, your Pillar Two analysis and your transfer pricing refresh.
