KPMG flags Canada budget bill, Pillar Two and crypto reporting changes

KPMG's latest Week in Tax reads like a workload map for teams already stretched across borders. The point is not that several tax items moved at once, but that they moved in different regimes, on different clocks, and with different consequences for compliance, reporting and client conversations.

What needs attention now

The fastest-moving issues are the ones that can change filings, amendments or client advice in the near term. Canada’s second budget bill, the EU’s VAT ruling on transfer-pricing adjustments, and the IRS settlement and plan-qualification items all carry immediate operational weight because they can affect year-end closes, returns, disputes and amendment calendars. For tax professionals juggling partner-track client work, these are the matters that can turn into avoidable fire drills if they sit unnoticed for even a week.

That is why KPMG frames Week in Tax as a weekly summary for executives who need to stay informed about tax developments. For a tax department, the practical value is simple: it helps separate the items that demand a response from the ones that can be parked until the next cycle.

Canada: Bill C-31 brings Pillar Two and crypto reporting into the same bill

The clearest Canadian development is Bill C-31, the Budget 2025 Implementation Act, No. 2, which received first reading in the House of Commons of Canada on May 6, 2026, after Finance Minister François-Philippe Champagne introduced it. This is the second piece of legislation to implement Budget 2025, and it is not a narrow clean-up bill. It includes amendments to Canada’s Global Minimum Tax Act, clean-economy incentives, indirect-tax measures, and the cryptoasset reporting framework.

For in-house and advisory teams, the immediate issue is sequencing. KPMG said the business income tax measures in Bill C-31 are considered substantively enacted for IFRS and ASPE purposes as of May 6, 2026, because the bill received first reading that day in a majority-government Parliament. That matters for provisions, deferred tax accounting, disclosure planning and year-end technical memos, especially for groups that need to explain the timing of recognition before the bill finishes its legislative path.

The broader signal is that Canada is bundling multiple policy priorities into one legislative vehicle. If you are tracking Pillar Two implementation, clean-economy credits, indirect tax and digital reporting, this is the sort of omnibus bill that forces coordination across international tax, indirect tax and financial reporting teams instead of letting each group work in isolation.

EU transfer pricing and VAT: the Stellantis ruling changes the risk conversation

The most important European item is the Court of Justice of the European Union’s May 13, 2026 judgment in Stellantis Portugal, S.A., Case C-603/24. The case came from Portugal’s Supremo Tribunal Administrativo and involved year-end transfer-pricing adjustments made to ensure a distributor reached a target profit margin.

The court held that those adjustments do not automatically count as consideration for VAT purposes. There must be a direct link between an identifiable service and the payment. That distinction is critical for multinationals that use profit-level true-ups in manufacturing, distribution and regional service structures.

In practice, this is where a tax team can get caught between direct tax logic and VAT logic. A transfer-pricing adjustment may make sense for income tax purposes, but that does not mean the same adjustment will be treated as a taxable supply of services for VAT. For KPMG staff working with operating companies, the ruling sharpens the need to document what the adjustment is actually paying for, not just how it resets profit.

It also has a cross-border governance implication. Groups with centralized pricing policies will now need to check whether their intercompany true-up process creates VAT exposure in any jurisdiction that follows the reasoning in the Stellantis case. That means TP, VAT and finance teams have to align on the mechanics before quarter-end closes and invoice runs lock the process in place.

U.S. settlements: conservation easement disputes move onto a 90-day clock

The IRS added another item that demands quick triage on May 13, 2026, when it announced a time-limited settlement opportunity for eligible taxpayers in conservation easement or historic preservation easement disputes. Eligible partnerships will receive settlement letters and then have 90 days to accept the offer.

That detail is the one that matters most operationally. The existence of a settlement program is one thing; the 90-day acceptance window is what turns it into an action item for tax controversy teams, partnership tax specialists and outside counsel. KPMG’s U.S. page describes the offer as applying to certain conservation easement disputes, while the IRS framed it as a way to resolve long-running cases more efficiently.

The timing also signals that this issue is not fading. Industry coverage notes that the IRS has made at least four settlement offers in syndicated conservation easement cases in recent years, which tells practitioners the agency still sees this as an enforcement priority. For firms advising partnerships, that means old disputes can still become fresh calendar risks.

Benefits and employee relations: fertility coverage gets a federal push

Another item with immediate implications for employers is the proposed fertility-benefits rule jointly published on May 13, 2026 by the Departments of Labor, Health and Human Services, and the Treasury. The proposal would create a limited excepted-benefits category for fertility benefits under ERISA, the Internal Revenue Code and the Public Health Service Act.

The proposal builds on an earlier May 10 release and was reported as part of the Trump administration’s effort to expand access to IVF and related treatment. For employers, this is not just a plan-design story. It touches nondiscrimination analysis, employee communications, benefit budgeting and how quickly an organization can move when reproductive-care expectations shift in the market.

For HR, benefits and tax professionals inside large professional services firms, the issue is especially sensitive because these decisions can affect recruitment, retention and internal perceptions of whether the firm is keeping pace with worker expectations. A benefit category may look technical on paper, but it can become a visible talent issue very quickly.

Retirement plan calendars: the next remedial cycle is already on the clock

The IRS also issued Notice 2026-34 on May 14, 2026, which provides the 2026 cumulative list of changes in plan qualification requirements for pre-approved defined contribution plans. That notice matters because it feeds the next remedial amendment cycle for those plans, which begins August 1, 2026 and ends July 31, 2027.

This is the kind of date that can disappear in a crowded workweek and then reappear as a deadline problem. Pre-approved plan providers rely on the cumulative list when seeking IRS opinion letters, so missing the cycle can complicate amendment planning and client deliverables. For firms handling retirement-plan work, the notice is a reminder to line up drafting, review and distribution schedules before the remedial window opens.

How to triage the week without missing the bigger picture

The common thread across these developments is not just that they are tax items. It is that they show how quickly tax work now spans legislation, financial reporting, VAT, controversy, employee benefits and retirement compliance at the same time. That creates a real operating challenge for busy-season teams and for client-facing professionals who have to know which issue needs an immediate memo, which one needs a policy read-through, and which one only needs to be put on the next watchlist.

A practical triage approach looks like this:

• Treat Canada’s Bill C-31 as a current accounting and implementation item, especially where Pillar Two and crypto reporting intersect with financial statements and local compliance.
• Treat Stellantis as a documentation and risk-assessment trigger for any group using year-end transfer-pricing true-ups.
• Treat the IRS settlement offer as a deadline item if you work on conservation easement disputes, because the 90-day window is where decisions get made.
• Treat the fertility-benefits proposal and Notice 2026-34 as near-term planning items for benefits and retirement-plan teams that need lead time, not last-minute fixes.

That is the real value of the week’s roundup. It helps tax teams decide what to handle today, what to prepare for next month, and what could turn into a much bigger problem if it is left to the next partner meeting.