Changes in Taxation and Company Law across EU from January

Key Tax and Corporate Law Changes Coming in 2026: What Businesses Need to Know

As 2026 approaches, governments across Europe are preparing to roll out major tax reforms and regulatory updates. These changes will have a significant impact on businesses of all sizes—especially companies operating across borders. From VAT adjustments and wage increases to new corporate sustainability rules, organizations should begin preparing early to stay compliant and financially secure.

Bulgaria Adopts the Euro on January 1, 2026

One of the most notable developments is Bulgaria’s official adoption of the euro.

What changes:

Bulgaria becomes the 21st member of the euro area.
All prices, invoices, financial statements, and accounting records will be displayed in euro starting January 1, 2026.
Businesses will need to update their systems to handle dual currency display during the transition period.

Why it matters:
Companies operating in Bulgaria will benefit from lower exchange-rate risks and easier trading within the eurozone, but they must prepare early for system updates and consumer-facing price adjustments.

Netherlands: Wide-Ranging Tax Plan for 2026

The Netherlands is implementing several tax changes aimed at simplifying the system and strengthening public finances.

Higher VAT on Accommodation Services

The reduced VAT rate for hotels, guesthouses, and other accommodation services will rise to the standard 21%.
This will likely increase costs in the tourism and hospitality sectors.

No VAT Increase for Culture, Media, and Sports

Although previously planned, the reduced VAT rate for these categories will remain unchanged in 2026.

Income Tax and Self-Employment Adjustments

Personal income tax brackets will be modified (details still to be finalized).
The self-employed persons’ deduction will drop further to €1,200, reducing tax benefits for freelancers and sole proprietors.

Environmental Levy Changes

Adjustments will affect motor vehicle taxes and discounts for electric cars.

Why it matters:
Hospitality businesses should prepare for higher VAT-related costs, while self-employed workers should expect lower tax deductions. Environmental tax changes may also influence fleet management decisions.

Germany: Minimum Wage and Tax Threshold Updates

Germany will see several people-focused adjustments targeting wages and low-income workers.

Higher Minimum Wage

Statutory minimum wage increases to €13.90 per hour from January 1, 2026.

Higher Cap for Mini-Jobs

The monthly earnings limit for “mini-jobs” (low-income flexible jobs) will rise to €603.

Higher Basic Tax-Free Allowance

The tax-free allowance increases to €12,348, providing some relief for taxpayers.

Why it matters:
Employers should budget for increased labor costs. Workers will benefit from improved take-home pay and a higher tax-free threshold.

Lithuania: Reduced VAT Rate Increases to 12%

From January 1, 2026, Lithuania’s reduced VAT rate will rise to 12%.

Why it matters:
Companies selling goods or services falling under the reduced rate will need to adjust pricing and invoicing systems accordingly.

Ireland: VAT Cut for Hospitality from July 1, 2026

Ireland plans a VAT reduction for the hospitality sector, starting mid-year on July 1, 2026.

Why it matters:
This is welcome news for restaurants, hotels, and tourism-related businesses, which may see improved margins or the ability to lower prices during the peak travel season.

Hungary: VAT Relief on Cattle Meat and Higher Exemption Threshold

Hungary is making two key VAT changes starting January 1, 2026:

New 5% VAT on Edible Meat and Offal of Domesticated Cattle

A reduced 5% VAT rate will apply to these food products, aiming to support agriculture and reduce consumer costs.

Individual VAT Exemption Threshold Increases

The threshold for businesses to qualify for VAT exemption will rise to HUF 20 million.

Why it matters:
Small businesses may benefit from simpler VAT administration, while the reduced rate could help stabilize food prices.

France: New VAT Requirements for Non-EU Companies

A major shift is coming for foreign businesses using France’s Regime 42 import rules.

What changes:

The “one-off fiscal representation” option ends on December 31, 2025.
Non-EU businesses must directly register for French VAT starting January 1, 2026.

Why it matters:
Companies importing goods into France without EU presence will need to prepare for direct VAT registration—an administrative and compliance step that cannot be ignored.

Finland: Corporate Tax Cut and Higher Gift/Inheritance Threshold

Finland will lower its corporate tax rate from 20% to 18%, but the change takes effect for financial years starting in 2026 and ending in 2027, meaning most companies will feel the impact in the 2027 tax year.

Additionally, the minimum threshold for taxable inheritances and gifts will increase.

Why it matters:
This is good news for businesses planning investments in Finland, as the corporate tax rate reduction improves competitiveness.

Company Law and EU-Wide Regulatory Developments

Montenegro: New Company Law Effective January 1, 2026

Montenegro will implement a new company law, requiring all existing companies to comply within three months.

Why it matters:
Businesses must review corporate structures, governance rules, and operational processes early in 2026 to avoid penalties.

EU Corporate Sustainability Due Diligence Directive (CSDDD)

EU member states have until July 26, 2026, to implement the CSDDD.

What this means:

Companies will need to assess and manage environmental and human-rights impacts throughout their supply chains.
Larger companies will face more extensive reporting and risk-management duties.

DAC9 and Global Minimum Tax Information Exchange

A new EU framework enabling member states to exchange information on top-up taxes related to the global minimum tax (Pillar 2) will take effect on January 1, 2026.

Why it matters:
Multinational groups should prepare for increased transparency and more complex cross-border tax reporting.

Conclusion: Prepare Now for a Changing Tax Landscape

The year 2026 will bring significant tax, VAT, wage, and regulatory changes throughout Europe. Businesses should begin preparing now by:

Updating accounting and payroll systems
Reviewing cross-border VAT obligations
Preparing for sustainability reporting requirements
Adjusting pricing strategies where VAT increases apply
Planning workforce budgets around new wage rules

By staying ahead of these developments, companies can reduce compliance risks and make smarter financial decisions for the years ahead.

To navigate these upcoming regulatory changes successfully, many businesses are reassessing their corporate structures, including the benefits of establishing a holding company in Europe. If you’re considering this step, CompyCo is here to make the process simple and stress-free.

Although CompyCo is not a tax advisor, we provide complete solutions for company registration across the EU, partnering with licensed professionals to handle filings, documentation, translations, tax setup, and banking arrangements on your behalf. With everything managed in one place and all professionals carefully vetted by our experienced team, you can be confident that your business is fully protected.

Ready to move forward? Book your free consultation with our International Business Set Up Advisor, explore the European countries where we can assist, or go directly to our Company Registration in Europe service.