[World Tax News] Italy Mirrors Russia’s Suspension of Tax Treaty Clauses and More

Editorial Team – [2026] 185 taxmann.com 96 (Article)

World Tax News provides a weekly snippet of tax news from around the globe. Here is a glimpse of the tax happening in the world this week:

1. Italy Mirrors Russia’s Suspension of Tax Treaty Clauses

Italy, through a release issued by the Ministry of Foreign Affairs and International Cooperation and published in the Official Gazette on 24 March 2026, has announced the suspension of certain provisions of the 1996 tax treaty between Italy and Russia. As per the release, Italy formally notified Russia on 13 March 2026 regarding the suspension of Articles 5 to 23 and Article 25, in accordance with Legislative Decree No. 192 dated 18 December 2025.

Legislative Decree No. 192 provides that where a foreign jurisdiction unilaterally suspends one or more provisions of a tax treaty, Italy shall reciprocally suspend the corresponding provisions with effect from the same date, subject to due communication to the concerned jurisdiction. During the period of suspension, and up to the 2028 tax period, relief from double taxation shall be governed by domestic law provisions, and domestic withholding tax rates shall apply until the suspension is withdrawn by the foreign jurisdiction. Further, no penalties or interest shall be levied in this regard.

It is pertinent to note that Russia had unilaterally suspended Articles 5 to 23 and Article 25 of the tax treaty with Italy with effect from 8 August 2023.

Source: Press Release

2. Belgium Issues Guidance on Pillar 1 Amount B

Belgium has issued administrative guidance on the implementation of Pillar 1 Amount B through Circular 2026/C/45, which supplements the existing transfer pricing framework under Circular 2020/C/35. This addendum incorporates the OECD Report on Amount B into Belgian guidance, forming part of the broader Two-Pillar Solution aimed at simplifying and standardising the application of the arm’s length principle for baseline marketing and distribution activities.

While Belgium has clarified that it will not permit the direct application of the Amount B approach for transactions taking place within its jurisdiction, it will recognise and accept the outcomes derived from the Amount B framework where such approach is applied by qualifying covered jurisdictions that have an applicable tax treaty with Belgium.

The addendum further specifies the conditions under which Belgium will accept this simplified and standardised pricing mechanism for in-scope transactions. It provides definitions of covered jurisdictions, lays down eligibility criteria and exclusions, and explains the determination of arm’s length margins through the OECD pricing matrix. In addition, it outlines documentation requirements and clarifies Belgium’s position on handling mutual agreement procedures and granting relief from double taxation in situations where counterparty jurisdictions either apply or do not apply the Amount B approach.

This guidance, as set out in Circular 2026/C/45, is applicable with effect from 1 January 2025.

Source: Circular 2026/C/45

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