On September 24, 2026, the Belgian Constitutional Court (BCC) ruled that the American Free Enterprise Chamber of Commerce (AFECC) still has standing in its case seeking to annul the Belgian Pillar 2 Undertaxed Payment Rule (UTPR).
As discussed in our previous alert, the AFECC requested the annulment on June 27, 2024 in what appeared to be the first legal challenge to the legality of the Pillar 2 rules.
The BCC has since referred the matter to the Court of Justice of the European Union (CJEU), asking whether the underlying EU Pillar 2 Directive is compatible with the EU Charter of Fundamental Rights, the Treaty on the Functioning of the EU, and the principles of legal certainty and fiscal territoriality.
In January 2026, the European Commission endorsed the Side-by-Side (SbS) safe harbor, which effectively exempts US-parented groups from the international provisions of Pillar 2. The Belgian government argued that this made the case irrelevant and that the AFECC no longer had standing.
The BCC’s ruling suggests there is no reason to withdraw the case before the CJEU, which will consider the technical merits of the case. The BCC refused AFECC’s request to ask the CJEU to expedite the case.
It is notable that AFECC is continuing to seek annulment of the UTPR despite the SbS safe harbor largely removing the UTPR risk for US-parented groups. If the CJEU finds that the UTPR provisions of the Directive breach fundamental rights or EU Treaty principles, the consequences could potentially extend beyond Belgium.
A ruling against the UTPR, which was designed to encourage jurisdictions to adopt the global minimum tax, could eliminate a central enforcement tool of Pillar 2 across the EU. In turn, this could potentially weaken political support for the framework internationally and slow, scale back, or even reverse implementation in some jurisdictions. A weakened Pillar 2 could also change the relative position of US multinational enterprises by diminishing any potential competitive advantages of the SbS safe harbor.
For more information, please contact the authors at DLA Piper.
Authors:
- Pie Geelen, Principal, Head of European Tax Desk at DLA Piper
- Sorina van Kommer, International Head of Knowledge - Tax at DLA Piper
- Nicolas Engelmann, Partner at DLA Piper
