Bank M&A Outlook for 2025
Overall M&A activity in 2024 continued to be subdued; however, the fourth quarter, especially after the Trump bump, showed signs of a significant pick up. Our M&A outlook for 2025 suggests the potential for a banner year. Numerous variables could hinder deal activity, but improving economic conditions coupled with enhanced net interest margins (NIMs) from lower short term interest rates and possible tax cuts should improve fundamentals. Moreover, a less hostile regulatory regime should eliminate a risk overhang to earnings.[1] The prospect for a more relaxed antitrust enforcement regime or at least less distrust of business combinations could create significant opportunities for strategic growth and investment.
Positive Factors for Dealmaking in 2025
CEO Confidence and Stock Market Performance. CEO confidence continues to go up, which can give C-suites and boards the necessary conviction to pursue M&A. If economic conditions improve, then capital markets should also strengthen. M&A volume frequently tracks stock market performance. In addition, improved economic conditions and higher trading price multiples could narrow valuation gaps between buyers and sellers that were obstacles to some transactions last year.
Antitrust. Not since Grover Cleveland has a President lost a bid for reelection and then ran again successfully. Thus, while a change in Presidential administration and political party leadership ordinarily brings policy uncertainty, we can look to President Trump’s first term for some guidance – but no guarantees – as to how his administration may govern this time around. This is particularly the case with the current regulatory skepticism, if not hostility, toward M&A. In 2023, President Biden adopted an Executive Order ostensibly designed to promote competition. The effect of that admonition was that regulators touching M&A across his administration, whether as part of an independent agency or otherwise, added criteria for M&A while also slowing the pace of review to allow for greater scrutiny. Bank regulators leaned into this Executive Order. Over the next four years, we generally expect regulators to be more open to structural remedies and less likely to block mergers outright. But caution is warranted. We may see bipartisan scrutiny of certain aspects of banking such as Fintech in light of lingering Synapse concerns. There are also populist views in the Trump administration and Congress that may scrutinize major consolidations or mergers, particularly if they will impact US jobs. The current expectation is also that the recently adopted HSR filing requirements for nonbank acquisitions will remain in effect.
Lower Interest Rates. Acquisition financing should become more attractive if the Federal Reserve moderates its rate cutting, so that long-term rates might stabilize. Because acquisition financing tends to be longer term in duration, long term rates are much more important. If Department of Government Efficiency (DOGE) is truly effective in cutting spending or at least the pace of increased spending, then long-term rates might actually come down. Private equity financing of corporate debt has taken bank market share. This competition has lead to greater availability of deal funding. An open issue is whether private credit will continue to play as large a role in corporate financing if the cost of traditional bank debt goes down.
For bank buyers, the Federal Reserve may maintain the current Fed Funds rate. As a result, NIMs may continue to widen as the yield curve steepens. Short term deposit rates have declined while the bond market expects long term rates to increase from inflationary tariffs, government spending and tax policy. Wider NIMs lead to higher bank valuations.
Tax Policy. If Congress pursues tax cuts, the resulting savings could generate more cash flow to pursue acquisitions and make exit transactions even more attractive to selling shareholders. Another issue to watch is whether the Tax Cuts and Jobs Act (TCJA), which expires at the end of 2025, is extended and/or modified.
Deregulation. Dealmaking could be impacted if the new administration carries out its goal of deregulation, although it is not clear how quickly that impact might be felt. Deregulation is most likely to open M&A doors not just in banking but for fintech, crypto, and financial services generally. The nominations of Scott Bessent for Treasury, Kevin Hassett for the National Economic Council, and Paul Atkins for the Securities and Exchange Commission all indicate a more hospitable banking environment.
While we expect a significant uptick in M&A activity, we may see particular volume from the following:
Private Equity Exits. It has been widely reported that many private equity funds need to sell their interests in portfolio companies in order to wind-up and return profits to their investors. Exit transactions have been delayed for a variety of reasons, including valuation gaps and a lack of sponsor-to-sponsor M&A activity (largely due to the increased cost of capital associated with leveraged acquisitions caused by higher interest rates).
Strategic Divestments. Banks will continue to explore divesting branches, non-core assets and business lines, especially insurance, to simplify their organizations and footprints and possibly to ward off threats from activist shareholders.
Credit Unions. While we have started to see pushback on credit union and bank tie ups from state regulators, it is likely that the NCUA will continue to permit such combinations. The rise in bank stock valuations may add competition in 2025 that was not available for many deals in 2024. Nonetheless, the lack of credit union taxation or comparable tangible equity requirement and risk-based capital rules should enable credit unions to continue to compete effectively for deals.
Higher Long-term Rates. Certain banks continue to suffer AOCI pressure from the run-up in long-term rates that accompanied recent Federal Reserve rate cuts. Increasingly, national banks with less than 2% tangible capital and all banks with poor NIMs may be pushed by their regulators to sell or at least engage in a dilutive capital raise.
Purchase Accounting/Stock Valuations. For over 40 years, economies of scale have led to vibrant annual results for bank M&A transactions. The punishing accounting marks (AOCI, loan mark-to-market and core deposit intangibles) from M&A have held back such pent up need for growth. Buyers need to use stock consideration to replace the capital from purchase accounting. Higher stock prices are allowing more buyers to do so with less dilution to their shareholders.
Countervailing Factors and Uncertainties
Of course, M&A activity in 2025 may fall short of expectations, particularly if economic conditions deteriorate. Various factors that could adversely impact M&A in 2025 include:
Trade Wars / Tariffs. President Trump has made clear his goal to negotiate trade agreements and expressed his willingness to impose tariffs, which would necessarily impact borrowers in affected industries as well as inbound/outbound investment involving certain countries. As with most government policies, tariffs invariably have winners and losers. To the extent tariffs allow businesses to raise prices, the higher returns could impact creditworthiness, while other businesses will suffer if their supply chain falls apart or they are unable to pass along higher costs to consumers. There may also be bipartisan support for some tariffs, particularly on China.
Politics. Uncertainty over important government policies could hold M&A back. There is the constant specter of disfunction in Washington, D.C., and a thin Republican majority. In addition, proposed cuts in government spending—perhaps led by DOGE—could impact the economy. Staffing or other budget cuts at key governmental agencies (e.g., banking regulators) could also delay the ability to consummate M&A transactions.
Near-Term Transition Issues. Compared to his first term, President Trump is acting more quickly in naming key appointees. Nonetheless, the people who need to run the various important government agencies must obtain Senate approval, where a successful confirmation is not guaranteed and there is a backlogged Senate calendar. Delayed appointments may also stall President Trump’s high-priority items such as border security and tax policy.
Inflationary Pressures. Ongoing inflation will impact markets and economic conditions generally. There are also particular government policies under discussion (e.g., immigration) that could contribute to inflationary pressures. If the Federal Reserve reverses recent accommodation, banks may again suffer shrinking NIMs. This would revive the negative spiral of reduced valuations and impact whether there can be a meeting of the minds on price.
State Attorneys General/State Bank Regulators. A more business-friendly antitrust posture from the federal government could be offset by state attorneys general or state level bank regulators. This could be led by more localized concerns about competition or by state officials who see political upside in challenging transactions.
Geopolitical Risks. Numerous geopolitical risks could escalate in 2025, including the spread of war in the Middle East, Europe or elsewhere, acts of terrorism, sanctions, and the worsening of diplomatic and economic relations with certain countries, any of which could adversely affect markets.
[1] Bank Director survey indicated that almost 75% of bankers viewed regulatory risk as one of the top three risk areas.
Carleton Goss, Michael R. Horne, Lucia Jacangelo, Nathaniel “Nate” Jones, Jay Kestenbaum, Marysia Laskowski, Abigail M. Lyle, Brian R. Marek, Joshua McNulty, Betsy Lee Montague, Alexandra Noetzel, Sumaira Shaikh, Jake Stribling, and Taylor Williams also contributed to this article.
2025 Updates to Georgia’s Notary Laws: What You Need to Know
Starting January 1, 2025, Georgia’s notaries public must comply with new provisions enacted by House Bill 1292. The law introduces updates to the obligations of notaries, focusing on journal-keeping, identity verification, and training requirements. Below is an overview of three key updates for notaries in Georgia.
Journal Requirements for Certain Notarial Acts: One of the most impactful changes is the mandatory maintenance of a written or electronic journal for notarial acts performed for “self-filers.”[1] A “self-filer” is defined as an individual submitting real estate-related documents, such as deeds or liens, for recording but who is not affiliated with certain exempted professional groups, like attorneys or title insurance agents.[2]
Confirmation of Identity: To address ambiguities in the prior statutory language, the new law clarifies the acceptable methods for confirming the identity of signers, oath-takers, and affirmants. The previous statutory language allowed identity verification through “personal knowledge or satisfactory evidence,” with only one example of “satisfactory evidence:” a Veterans Health Identification Card issued by the U.S. Department of Veterans Affairs. The amended statute replaces the vague standard with a requirement for verification using government-issued photo identification documents (valid driver’s license; personal identification card issued under Georgia law; or military identification card—still including a Veterans Health Identification Card).[3] Personal knowledge remains a valid method of identity confirmation under the new law.
Mandatory Training for Initial and Renewed Commissions: Georgia notaries public must now complete educational training prior to their initial appointment and within 30 days of each renewal.[4] The Georgia Superior Court Clerks’ Cooperative Authority is tasked with creating and regulating these programs.[5]
Steps to Determine If the Journal Requirement is Applicable to a Notarial Act
In light of the changes, Georgia’s public notaries may consider the following when performing notarial acts:
1: Identify the Type of Document.[6] Confirm if the document being notarized falls into one of the following categories:
Deeds
Mortgages
Liens as provided by law
Maps or plats related to real estate
State tax executions and renewals
If the document is not one of these types, the new journaling requirement does not apply.
2: Determine if the Requesting Individual is a Self-Filer.[7] Check if the individual requesting the notarial act qualifies as a “self-filer.” A self-filer is any individual who submits one of the above documents for recording and is not part of the following excluded groups:
Title insurance agents or their representatives.
Attorneys licensed in Georgia or their representatives.
Licensed real estate professionals.
Agents of federally insured banks or credit unions.
Agents of licensed or exempt mortgage lenders.
Servicers as defined by federal regulations.
Public officials performing official duties.
Licensed professional land surveyors.
If the requesting individual is part of any excluded group, the journal requirement does not apply.
3: Verify the Individual’s Identity.[8] Ensure the individual’s identity is confirmed through:
A government-issued photo identification (e.g., driver’s license, passport, military ID); or
Personal knowledge of the individual by the notary.
Step 4: Record Required Information in Journal.[9] If the document qualifies and the requesting individual is a self-filer, the notary must record the following in their journal:
Self-filer Information:
Name
Address
Telephone number
Details of the Notarial Act:
Date, time, and location of the notarization.
Type of document notarized.
Identification Information:
Type of government-issued photo identification presented.
Elements of the identification document (e.g., ID number, if applicable).
Note if identity was verified through personal knowledge.
Signature:
Obtain the self-filer’s signature in the journal.
Step 5: Maintain the Journal.[10] Ensure the journal is securely stored, either as a physical written document, or electronically. The duration of the notary’s obligation to maintain this journal is not clarified in the new amendment.
[1] O.C.G.A. § 45-17-8(g).
[2] O.C.G.A. § 44-2-2(a).
[3] O.C.G.A. § 45-17-8(e).
[4] O.C.G.A. § 45-17-8(h)(1).
[5] O.C.G.A. § 45-17-8(h)(2).
[6] O.C.G.A. § 44-2-2(b)(1)(A)-(E).
[7] O.C.G.A. § 44-2-2(a)(1)-(8).
[8] O.C.G.A. § 45-17-8 (e). Note: this step is necessary regardless of whether the journal requirement applies.
[9] O.C.G.A. § 45-17-8 (g)(2).
[10] O.C.G.A. § 45-17-8 (g)(2).
5 Trends to Watch: 2025 Capital Markets
1. Strong U.S. Equity Markets, SPACs, and ETFs: The U.S. equity markets are likely to kick off the year strong, as a variety of players are expected to take advantage of the early days of the incoming presidential administration. This may lead to a flurry of deals, particularly during the first three quarters, as companies seek to capitalize on favorable conditions and the markets assess the impact of the new administration on the economy and the broader geopolitical environment.
A new wave of SPAC IPOs gained momentum in late 2024 that is likely to continue into 2025, particularly as the incoming administration takes aim at accelerating business growth through deregulation and expected tax cuts impact capital gains and losses. The decline in the PIPE market to facilitate SPAC mergers will need a robust turnaround, however, to determine if the SPAC will ultimately prove to once again be a viable vehicle for alternative entry to the public markets. Exchange-traded funds (ETFs) are also experiencing dynamic growth and change, particularly with the rise of thematic and niche ETFs that concentrate on specific trends like clean energy, technology, or emerging markets, appealing to investors interested in particular sectors or themes. As ETFs gain popularity, there is a possibility of increased regulation, with new rules potentially being introduced to ensure transparency, liquidity, and investor protection. Furthermore, innovation in product offerings, such as the creation of actively managed ETFs or those incorporating alternative assets, could provide investors with a wider array of investment options. These developments are shaping the ETF landscape by broadening the scope of investment opportunities and ensuring a more regulated market environment.
2. Regulatory Changes and Digital Assets: Republican commissioners and staff attorneys at the SEC and CFTC have signaled that, while awaiting comprehensive legislation and confirmation of the new SEC chair, they intend to reduce reliance on enforcement to mold regulatory guardrails, provide increased executive relief through no-action letters, and collaborate with industry participants in crafting rules differentiating tokens as commodities from tokens as securities. In doing so, clearer regulatory guidelines could emerge, fostering a more favorable environment for blockchain investments. Individual states such as California, on the other hand, may increase their enforcement activity in 2025.
3. Divergent Landscape Continues for Climate and Human Capital Disclosures: In the United States, there may be a rollback of regulations at the federal level requiring climate risk disclosures, while international issuers will still need to comply with EU and UK rules, potentially creating disparities in disclosure requirements. Similarly, there could be less emphasis on human capital disclosures, including those related to ESG (environmental, social, and governance) criteria. Investors might also reduce their demands on issuers regarding these disclosures. Meanwhile, certain states (e.g. California, Minnesota, and New York) are continuing to move forward with their climate-risk disclosure reporting regimes. In the EU and UK, the development of sustainability laws and regulations continues at a fast pace, which could influence debt and equity capital markets transactions, including corporate disclosure, product level disclosure, and ESG due diligence obligations and ratings.
4. Revised Regulatory Framework for EU Equity Issuers: In the European Union, the recent implementation of the Listing Act is widely expected to represent a pivotal milestone for EU capital markets, aimed at streamlining access and reducing administrative burdens, particularly for well-established issuers. This legislative measure is anticipated to further enhance the European financial sector by simplifying the process for companies to access public markets, thereby creating a more dynamic and competitive environment and providing a more viable alternative to standard bank financing. By simplifying some of the complex offering and listing regulatory obstacles and facilitating easier market entry, the Act is expected to enhance liquidity and attract a broader range of issuers, including small and medium-sized enterprises, fostering innovation and economic expansion across member states. While it may take some time to fully benefit from all the regulatory changes aimed at addressing the concerns raised by practitioners in the field, the recent legislation clearly indicates that the EU seeks to strengthen its position as a leading global financial center.
5. Anticipated Tax Policy Changes Likely to Influence Investment Strategies: Potential changes in tax policies, such as adjustments to capital gains tax rates, could significantly influence investor behavior and decision-making related to asset sales and investment strategies. With the Tax Cuts and Jobs Act of 2017 set to expire in 2025, Congress may consider extending it or implementing further tax cuts. Additionally, the use of advanced real-time tax management tools is likely to become more prevalent, enabling investors to optimize their tax positions concerning capital gains and losses. These developments could collectively impact the landscape of capital gains and losses, shaping investment strategies and economic growth.
Dorothee & Rafał Sieński contributed to this article.
Supporting Employees Impacted by Wildfires
The ongoing Los Angeles, California, wildfires have caused widespread devastation, forcing residents to evacuate, and have destroyed homes and communities. President Joe Biden approved a Major Disaster Declaration in response to the wildfires in Los Angeles County on January 8.
There are several ways employers can support employees impacted by the wildfires, including by making qualified disaster relief payments to employees and creating paid leave sharing programs. Employers can also set up employee assistance funds through existing public charities that administer disaster relief programs, create an employer-sponsored charitable organization that provides disaster relief payments to employees, or set up a donor-advised fund with a sponsoring public charity. In addition, employers can allow employees greater access to distributions and loans from accounts under employer-sponsored retirement plans.
This alert provides a high-level overview of qualified disaster relief payments, leave sharing programs, disaster relief options using charitable organizations, and expanded opportunities to receive distributions and loans from employer-sponsored retirement plans. The following is intended to provide a brief introduction to the options available to employers and does not address the specific requirements for each option. Qualified disaster relief payments, leave bank programs, charitable organizations, and expansion of distributions and loans from employer-sponsored retirement plans must be carefully structured to ensure compliance under the federal tax laws. It is recommended to consult with legal or tax professionals to ensure full compliance and avoid potential liabilities.
Qualified Disaster Relief Payments
Section 139 of the Internal Revenue Code permits employers to make “qualified disaster relief payments” to employees in areas with an emergency disaster or major disaster declaration. Qualified disaster relief payments are not included in the employee’s gross income or subject to employment tax. Employers can also deduct qualified disaster relief payments to the same extent as payments treated as income to the employee.
A payment qualifies as a “qualified disaster relief payment” if the following requirements are satisfied:
There has been a “qualified disaster” (e.g., a federally declared disaster issued by the President of the United States).
The payment is intended to cover reasonable and necessary personal, family, living, or funeral expenses, or reasonable and necessary expenses incurred for repairing or replacing a personal residence or its contents, provided the expenses were incurred as a result of the qualified disaster and not covered by insurance or other resources.
The payment is not income replacement (e.g., severance, furlough pay, or lost wages from missed work).
Since President Biden approved the Major Disaster Declaration, employers can therefore provide financial assistance to employees impacted by the wildfires, provided that the payments meet the additional requirements described above. Employers who provide qualified disaster assistance payments should maintain adequate records for the program and request that recipients retain receipts and other documentation.
Leave Sharing Programs
Under Internal Revenue Service (IRS) Notice 2006-59, the IRS allows employers, responding to a “major disaster” (as declared by the president), to establish “leave banks” that enable employees to contribute accrued leave (up to the maximum amount the employee normally accrues during the year) to a collective pool for use by employees who have been adversely affected by a “major disaster” necessitating absence from work. Because President Biden approved a Major Disaster Declaration in response to the wildfires in Los Angeles County, employers can use employer-sponsored leave banks to support employees adversely impacted by the wildfires with additional paid leave. The leave is treated as wages with respect to the leave recipient and subject to federal income tax withholding and employment tax (e.g., FICA and FUTA). Leave donors are not entitled to a charitable contribution deduction on their individual income tax returns for the donated leave, but the portion of leave donated is not treated as income or wages to the leave donor. For employer-sponsored leave banks to qualify for the US federal tax treatment addressed herein, leave bank programs must meet certain additional requirements set forth in IRS Notice 2006-59.
Charitable Organizations
Employers can also support employees and other individuals impacted by the wildfires through disaster relief options using charitable organizations. Employers can set up employee assistance funds through existing public charities that administer disaster relief programs, create an employer-sponsored charitable organization that provides disaster relief payments to employees, or set up a donor-advised fund with a sponsoring public charity.
Employee Assistance Fund Administered by Existing Public Charity
Employers can create and fund an employee assistance fund administered by an existing public charity. This allows an employer to provide critical financial assistance to employees affected by the disaster while leveraging the charity’s established infrastructure and expertise.
Employer-Sponsored Public Charity
Employers can establish an employee-sponsored public charity to provide disaster relief payments to employees and other individuals impacted by current and future disasters. Employee-sponsored public charities are typically funded not only by the employer but also by employees or other donors. An employer-sponsored public charity can generally provide disaster relief to employees affected by current and future disasters, including qualified and non-qualified disasters or emergency hardship situations.
Employee-Sponsored Private Foundation
Employers can also establish an employee-sponsored private foundation to provide disaster relief payments to employees and other individuals impacted by current and future disasters. Employee-sponsored private foundations are generally funded by the employer and subject to additional requirements and restrictions that do not apply to public charities. An employer-sponsored private foundation can provide disaster relief to employees affected by current and future qualified disasters (but not non-qualified disasters or emergency hardship situations).
Employer-Sponsored Donor-Advised Fund
Employers can set up a donor-advised fund with a sponsoring public charity to support employees and their family members who are victims of qualified disasters. The sponsoring organization manages the fund, and a selection committee has advisory privileges over the fund. An employer-sponsored donor-advised fund can provide disaster relief to employees affected by current and future qualified disasters (but not non-qualified disasters or emergency hardship situations).
Disaster relief options involving charitable organizations are subject to complex tax requirements and must be carefully structured to ensure compliance.
Distributions and Loans From Employer-Sponsored Retirement Plans
Employers can allow their retirement plans to offer relief to “qualified individuals” impacted by a qualified disaster through expanded distribution options, increased access to plan loans, and loan repayment relief. A “qualified individual” is an individual whose principal residence during the incident period of any qualified disaster is in the qualified disaster area and the individual has sustained an economic loss by reason of that qualified disaster.
To the extent the plans do not already have provisions related to expansions of distributions and loans in the context of federally declared disasters, employers will need to amend their plans and would have until the end of this year to adopt the amendments.
Qualified Disaster Recovery Distributions
Employers can permit qualified individuals to receive distributions from the employee’s plan account in an amount up to $22,000 per disaster, with no early withdrawal penalty, and the option to repay all or a portion of the distribution within three years.
Increase to Plan Loan Limit
Employers can increase the maximum loan amount available to qualified individuals for plan loans made during a specified period following a qualified disaster. The plan loan limit may be increased to the full amount of the individual’s vested account under the plan, but not more than $100,000 (minus outstanding plan loans of the individual).
Relief for Plan Loan Repayments
Employers can also provide qualified individuals additional time (up to one year) to repay plan loans outstanding on the date of the declaration of the qualified disaster.
Mexico’s General Foreign Trade Rules For 2025
On Dec. 30, 2024, the Mexican Tax Administration Service (SAT) published in the Official Gazette of the Federation (DOF) the General Foreign Trade Rules for 2025, which seek to implement certain measures in order to optimize tax collection in Mexico and expand compliance standards. These rules will be in effect from Jan. 1 to Dec. 31, 2025.
This GT Alert highlights the most relevant changes to the General Foreign Trade Rules. Companies involved in Mexican foreign trade should timely review these provisions to enhance compliance. Adherence to the rules may also impact companies’ strategic planning, operating costs, and risk management activities.
General Considerations
ANAM Portal
Various guidelines that were previously released through the SAT Portal must now be managed through the National Customs Agency of Mexico (ANAM) Portal. Users should verify and follow the specific requirements stipulated in this new portal.Reference to Rules 1.6.28, 1.7.1, 1.7.7, 1.8.2, 1.9.4, 1.9.5, 1.9.6, 1.9.9, 1.9.11, 1.9.20, 1.9.21, 2.3.4, 2.3.8, 2.3.10, and 2.4.12 for 2025.
Changes of forms or procedure files
Various forms and/or files corresponding to foreign trade procedures were modified, so companies may need to carefully review their updated versions and ensure they comply with the requirements established in each case.Reference to Rules 1.1.10., 1.4.14., 2.2.6., 2.3.8., 3.1.26., 3.5.7., 4.2.2., 7.3.3. for 2025.
Considerations by Title, Chapter, and Rule
Title 1. General Provisions and Acts Prior to Dispatch
Chapter 1.2. Filing Promotions, Statements, Notices, and Forms
Submission of promotions, applications, or notices without format (Annex 2)
The 2025 rules explicitly specify the requirements that must be met by promotions, applications, or notices submitted in writing to the customs authority, in accordance with articles 18 and 18-A of the Federal Tax Code (CFF), strengthening clarity in their application.
The procedures established in Annex 2 (formats for foreign trade procedures) may continue to be presented via traditional means that were used before these documents had to be submitted to the authority’s digital platform or the tax mailbox.
However, new procedures must be submitted in writing to the competent authority, complying with the corresponding provisions. This situation will be maintained until the corresponding authority publishes the specific formats that must be used to carry out these procedures electronically.Reference to Rule 1.2.2. for 2025.
Chapter 1.6. Determination, Payment, Deferral, and Compensation of Contributions and Guarantees
Transfer and change of fixed asset regime, companies in the IMMEX Program
Neither the physical presentation nor the payment of the General Import Tax (IGI) is required for the transfer of goods classified as fixed assets between companies in the IMMEX Program (Manufacturing, Maquiladora, and Export Services Program), provided that certain requirements are met.
The section of the regulatory provision that allowed companies to offset the IGI payment made when transferring fixed asset goods temporarily imported before Jan. 1, 2001, was deleted. This rule applied only when the IGI had been paid at the time of the transfer, allowing its crediting on future imports.
The 2025 rules also establish that, when changing the regime from temporary to definitive importation of fixed asset goods under the IMMEX Program, the customs value declared in the temporary import declaration must be considered. This value can be reduced in proportion to the number of days in which the goods were deducted. If there are no authorized deduction percentages, it is assumed that the asset was deducted for 3,650 days.
The 2025 rules eliminate the portion that expressly referred to the possibility of applying the preferential rate of an authorized Sectoral Promotion Program (PROSEC) when changing the import regime from temporary to definitive, even for goods imported before Jan. 1, 2001, provided that the importer was registered in said program.Reference to Rule 1.6.10. for 2025.
Title 2. Entry, Exit, and Control of Goods
Chapter 2.3. Authorized Customs Facilities, Strategic Customs Facilities, and Operations within the Customs Facility
Obligations of strategic authorized customs facilities
Legal entities managing or operating a strategic authorized customs facility must henceforth comply with the “Guidelines for Infrastructure, Control, Surveillance, and Security, as well as Technological Recommendations regarding Closed-Circuit Television Cameras, Installations, and Systems, for Administrators and Operators of Strategic Authorized Customs Facilities.”Reference to Rule 2.3.4. for 2025.
Title 3. Customs Clearance of Goods
Chapter 3.7. Simplified Administrative Procedures
Obligations of courier and parcel companies
From now on, companies registered as courier and parcel services with ANAM must provide access to their risk analysis system through a written document submitted to the corresponding customs office, as well as to the General Directorate of Customs Investigation (DGIA) and the General Administration of Foreign Trade Audits (AGACE).
This document must be submitted within the month following registration or renewal in the Courier and Parcel Companies Registry. The document will be valid for six months and must be resubmitted whenever there is any modification related to system access.
According to the transitional provisions published in the DOF, companies currently operating under this scheme must submit the document no later than Jan. 31, 2025.Reference to Rule 3.7.4 for 2025.
Assessment of contributions for the import of goods through the simplified procedure carried out by courier and parcel companies
There are significant changes in the assessment of import contributions made by courier and parcel companies:
In general, the new regulations establish that the contributions caused by the importation of goods made through courier and parcel using the simplified procedure will be determined by applying a global rate of 19% to the goods’ value.
It should be noted that the 2024 rules allowed exemption from VAT and IGI when the imported goods did not exceed $50 USD, as long as they were not subject to non-tariff regulations and that the corresponding quota of the Customs Processing Fee (DTA) was covered.
However, the new 2025 provision limits the exemption from such taxes to goods whose value does not exceed $1 USD and that come from countries party to international instruments such as the FTA, PAAP, and TIPAT (a different scheme from the USMCA that will be specifically addressed), maintaining the same general requirements that were addressed in the previous paragraph. This amendment represents a tightening of the criteria for exemption, reducing the threshold for application of the facility.
Under the USMCA, goods whose value does not exceed $50 USD will not be subject to IGI and VAT payments and must comply with the general requirements referred to above. Merchandise with a value that exceeds that amount and does not exceed $117 USD will be subject to a preferential rate of 17%.Reference to Rule 3.7.35. for 2025.
Title 4. Customs Regimes
Chapter 4.2. Temporary Import Procedure to Return Abroad in the Same State
Return of foreign vehicles whose permit for entry or temporary importation of vehicles has expired
The 2025 rules include a change to the process of returning foreign vehicles whose temporary import permit has expired. Now, in addition to transmitting the B17 form, a folio must be generated after the transmission of the notice. Once done, the transfer of the vehicle to the border strip or region or to the customs office of departure for its return abroad may be carried out within a period of five days beginning the next business day after the notice is submitted.Reference to Rule 4.2.20. for 2025.
Chapter 4.5. Fiscal Warehouse
Destruction of bonded warehousing goods for display and sale
According to the 2025 rules, authorized legal entities must comply with the requirements established in the procedure sheet 111/LA “Notice for the destruction of goods from the tax warehouse for the exhibition and sale of goods,” contained in Annex 2, before being able to proceed with destruction. This change introduces an additional condition, as the notice is no longer sufficient on its own to authorize the destruction of goods—its presentation is subject to prior compliance with the specific requirements set out in the procedure sheet 111/LA.Reference to Rule 4.5.22. for 2025.
Chapter 4.6. Transit of Goods
Internal and international transits between customs, authorized customs sections, and international airports
The 2025 rules designate the transfer of goods in both directions between the customs section of the General Mariano Escobedo International Airport and the customs section of Salinas Victoria B (Interpuerto) as an international internal transit route.Reference to Rule 4.6.1. for 2025.
Obligations in international transits (Annex 16)
The 2025 rules account for the possibility of allowing the untimely arrival of goods, on a one-off occasion, when circumstances of force majeure or a fortuitous event arises that prevents compliance with the established deadlines. In these cases, the customs broker, customs agency, or person responsible for international transit must submit a written notice to the customs authorities explaining the reasons for the delay.Reference to Rule 4.6.20. for 2025.
Provisions Removed
Chapter 4.3. Temporary Import for Processing, Transformation, or Repair
Guarantee of the payment of taxes for the temporary importation of goods indicated in Annex II of the IMMEX Decree
The 2025 rules eliminate the stipulation that companies in the IMMEX Program, when temporarily importing sensitive goods referred to in Annex II of the Decree, had to guarantee the payment of contributions through bond policies issued by authorized institutions. These bonds had to meet specific requirements and be submitted electronically to the tax authorities.
This modification is related to the decree published in the DOF Dec. 19, 2024, through which the government made significant modifications to the IMMEX Decree, transferring various tariff items corresponding to textile products from Annex II (which includes sensitive goods) to Annex I, which lists those goods whose temporary importation under the IMMEX Decree is prohibited.
Notwithstanding the foregoing, goods such as sugar and steel continue to be included in Annex II, so companies importing these goods and others listed in Annex II should be aware of the implications of this modification.Reference to Rule 4.3.2. for 2024 eliminated.
Chapter 4.4. Temporary Export
Temporary export of livestock and research goods
The 2025 rules eliminate the explicit mention of the procedures and requirements for the temporary export of livestock and goods used in scientific research.Reference to Rule 4.4.4. for 2024 eliminated.
Additional Considerations
Chapter 1.10. Direct Firm and Legal Representative
Authorization for the transmission of customs declarations through the SEA, accreditation of legal representative, auxiliaries, and customs
Following the constitutional reform published Oct. 31, 2024, which modifies articles 25, 27, and 28 of the Political Constitution of the United Mexican States, the productive companies of the state are now considered state-owned public enterprises, losing their operational independence.
The 2025 rules incorporate this change.Reference to Rule 1.10.1. for 2025.
Publication of annexes
As a complement to the publication of the General Foreign Trade Rules for 2025, on Jan. 6, 2025, Annexes 3–9, 11, 12, 14–21, 23–26, and 28–30 were released in the DOF. These annexes contain key information on the classification of goods, valuation criteria, official formats, applicable tariffs, and operating procedures, among other aspects relevant to compliance with customs regulations.
Annex 13 was published together with the General Foreign Trade Rules for 2025 Dec. 30, 2024. Annexes 1, 2, 10, 22, and 27 are expected to be disseminated in the future.
These annexes establish guidelines and requirements applicable to foreign trade operations and companies should review their content in detail to assess their impact and comply with the 2025 provisions.
Provisions Removed
Chapter 1.4. Customs Brokers and Authorized Representatives
Authorization and extension of customs agents
The 2025 rules remove the provision that allowed individuals obtaining a customs broker license to designate authorized representatives in cases of the original broker’s death, permanent disability, or voluntary withdrawal. This change may restrict the continuity of customs operations by eliminating this right of action in exceptional situations.Reference to Rule 1.4.2. by 2025.
Authorization to amend the designation, ratification, and publication of customs broker patent by replacement
The 2025 rules remove the procedure that allowed a customs broker who ratified their retirement in a timely manner and received the Voluntary Retirement Agreement to access the benefit of obtaining the “Agreement for the granting of a customs broker patent by substitution.” The last date a customs broker could obtain this benefit was July 21, 2021.Reference to Rules 1.4.11. for 2024 eliminated.
Notice of incorporation of substitute customs broker to entities previously constituted by the customs agents they replace
Related to the removal of the above procedure, the 2025 rules also eliminate specific procedures for the incorporation of substitute customs agents to previously constituted entities.Reference to Rules 1.4.13. for 2024 eliminated.
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Weekly IRS Roundup December 30, 2024 – January 3, 2025
Check out our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for the week of December 30, 2024 – January 3, 2025.
December 30, 2024: The IRS released Internal Revenue Bulletin 2025-1, which includes the following:
Revenue Procedure 2025-1, which contains the revised procedures for letter rulings and information letters issued by the different associate chief counsel offices. This revenue procedure also contains the revised procedures for determination letters issued by the Large Business and International Division, the Small Business/Self-Employed Division, the Wage and Investment Division, and the Tax Exempt and Government Entities (TE/GE) Division.
Revenue Procedure 2025-2, which explains when and how associate chief counsel offices should provide advice in technical advice memoranda (TAM) as well as taxpayers’ rights when a field office requests a TAM.
Revenue Procedure 2025-3, which provides a revised list of Internal Revenue Code (Code) areas under the jurisdiction of the following associate chief counsel offices: Corporate; Financial Institutions and Products; Income Tax and Accounting; Passthroughs and Special Industries; Procedure and Administration; and Employee Benefits, Exempt Organizations, and Employment Taxes. These relate to matters in which the IRS will not issue letter rulings or determination letters.
Revenue Procedure 2025-4, which provides guidance on the types of advice the IRS offers to taxpayers on issues under the jurisdiction of the IRS Commissioner, TE/GE Division, and Employee Plans Rulings and Agreements. It also details the procedures that apply to requests for determination letters and private letter rulings.
Revenue Procedure 2025-5, which provides the procedures for issuing determination letters on issues under the jurisdiction of the Exempt Organizations Rulings and Agreements. It also explains the procedures for issuing determination letters on tax-exempt statuses for organizations applying under Code Section 501 or 521, private foundation status, and other determinations related to tax-exempt organizations. Additionally, the revenue procedure applies to revocation or modification of determination letters and provides guidance on the exhaustion of administrative remedies for purposes of declaratory judgment under Code Section 7428.
Revenue Procedure 2025-7, which provides the areas under the jurisdiction of the associate chief counsel (international) in which letter rulings and determination letters will not be issued.
December 30, 2024: The IRS published Treasury Decision 10018, which contains final regulations regarding the filing of consolidated returns by affiliated corporations. They modify the consolidated return regulations to reflect statutory changes, update language to remove antiquated or regressive terminology, and enhance clarity. The IRS separately issued proposed regulations under which a transferee’s assumption of certain liabilities from a member of the same consolidated group will not reduce the transferor’s basis in the transferee’s stock received in the transfer.
December 30, 2024: The IRS published final regulations clarifying when tax-exempt bonds are considered retired for federal income tax purposes under Code Section 103. The regulations affect state and local governments issuing tax-exempt bonds and address significant modifications to bond terms or the acquisition and resale of bonds.
December 30, 2024: The IRS published final regulations on information reporting by brokers who regularly provide services for digital asset sales and exchanges. The regulations require brokers to file information returns and furnish payee statements reporting gross proceeds from digital asset transactions. The regulations also provide transitional penalty relief for brokers adapting to these new requirements. The regulations take effect February 28, 2025.
January 2, 2025: The IRS issued proposed regulations pertaining to the Code Section 5000D excise tax on the sales of certain drugs. The proposed regulations outline the imposition and calculation of the excise tax and would affect manufacturers, producers, and importers of designated drugs. The IRS also issued Revenue Procedure 2025-9, which provides a safe harbor and safe harbor percentage that a manufacturer, producer, or importer may use to identify applicable sales of a designated drug described in Section 5000D(b).
January 3, 2025: The IRS announced that on January 10, 2025, it will release final regulations for the Clean Hydrogen Production Tax Credit under Code Section 45V. The regulations will provide rules for:
Determining lifecycle greenhouse gas emissions rates resulting from hydrogen production processes
Petitioning for provisional emissions rates
Verifying the production and sale or use of clean hydrogen
Modifying or retrofitting existing qualified clean hydrogen production facilities
Using electricity from certain renewable or zero-emissions sources to produce qualified clean hydrogen
Electing to treat part of a specified clean hydrogen production facility as property eligible for the energy credit.
These regulations will affect all taxpayers who produce qualified clean hydrogen and claim the Clean Hydrogen Production Tax Credit, elect to treat part of a specified clean hydrogen production facility as property eligible for the energy credit, or produce electricity from certain renewable or zero emissions sources used by taxpayers or related persons to produce qualified clean hydrogen.
January 3, 2025: The IRS reminded disaster-area taxpayers who received extensions to file their 2023 returns that, depending upon their location, their returns are either due by February 3 or May 1, 2025:
Taxpayers in Louisiana, Vermont, Puerto Rico, and the Virgin Islands and parts of Arizona, Connecticut, Illinois, Kentucky, Minnesota, Missouri, Montana, New York, Pennsylvania, South Dakota, Texas, and Washington have until February 3, 2025, to file their 2023 returns.
Taxpayers in Alabama, Florida, Georgia, North Carolina, and South Carolina and parts of Alaska, New Mexico, Tennessee, Virginia, and West Virginia have until May 1, 2025, to file their 2023 returns. For these taxpayers, May 1 will also be the deadline for filing their 2024 returns and paying any tax due.
Eligible taxpayers include individuals and businesses affected by various disasters that occurred during the late spring through the end of 2024. The filing deadline extension for 2023 returns does not apply to payments.
Taxpayers who live or have a business in Israel, Gaza, or the West Bank and certain other taxpayers affected by the attacks in Israel have until September 30, 2025, to file and pay. This includes all 2023 and 2024 returns.
Final Reissuance Regulations Released (Finally)
On December 30, 2024, the IRS and Treasury Department released final regulations regarding the reissuance analysis of tax-exempt bonds which finalize proposed regulations issued in 2018 (with some technical corrections). The final regulations are significant in that, firstly, they are intended to coordinate prior guidance in Notices 88-130 and 2008-41 regarding qualified tender bonds with Treasury Regulations § 1.1001-3 to determine when a tax-exempt bond is retired; and secondly, Notice 88-130 first promised these final regulations in July 1988—over 36 years ago (when hairstyles and tender bonds needed regulating). The final regulations amend § 1.1001-3 to incorporate and reference newly added § 1.150-3 which provides three general rules for when a tax-exempt bond is retired:
(1) a significant modification occurs under § 1.1001-3,
(2) the issuer or its agent acquires the bond in a manner that extinguishes the bond, or
(3) the bond is otherwise redeemed.
The final regulations set forth three exceptions to retirement or reissuance treatment (the first two exceptions apply to qualified tender bonds[1], and the third applies to all tax-exempt bonds:
(1) a qualified tender right[2] is disregarded in applying § 1.1001-3 to determine whether a change to the interest rate or interest rate mode (pursuant to the terms of the qualified tender bond) is a modification,
(2) an acquisition of a qualified tender bond by the issuer or its agent does not extinguish the bond if done pursuant to the operation of a qualified tender right and neither the issuer nor its agent holds the bond after the close of the 90-day period starting from the tender date.
(3) an acquisition of a tax-exempt bond by a guarantor or liquidity facility provider acting on the issuer’s behalf does not extinguish the bond if done pursuant to the terms of the guarantee or liquidity facility and the acquirer is not a related party to the issuer of the bond.
Consistent with Notice 2008-41, the final regulations permit a qualified tender bond to be resold at a premium or discount when the qualified tender right is exercised in connection with a conversion of the interest rate mode to a fixed rate for the remaining term of the bond. However, the final regulations, do not retain some rules from the prior guidance, including (i) that modifications to collateral or credit enhancement are significant only if there is a change in payment expectations, (ii) a specific exception for corrective changes, and (iii) permitting a conduit borrower under certain circumstances to purchase bonds that financed its conduit loan. The stated reasons for discontinuing these rules are that § 1.1001-3 is sufficient or that the rules were specific to the extraordinary circumstances of the 2008 financial crisis and no longer necessary.
Issuers may continue to apply Notice 88-130 or Notice 2008-41 until December 30, 2025 at which point such Notices will become obsolete and § 1.150-3 will govern the reissuance analysis in all instances.
And finally, the final regulations authorize the publication of further guidance in the Internal Revenue Bulletin to address “appropriate, tailored circumstances” where flexibility may be needed in determining when retirement and reissuance has occurred. So hold your breath (or don’t) for possibly final final guidance at which point we will likely all be retired (and hopefully not extinguished).
[1] Section 1.150-3 defines qualified tender bond as “a tax-exempt bond that, pursuant to the terms of the bond, has all of the following features: (1) during each authorized rate mode, the bond bears interest at a fixed interest rate, a qualified floating rate under § 1.1275‑5(b), or an objective rate for a tax-exempt bond under § 1.1275‑5(c)(5); (2) interest on the bond is unconditionally payable (as defined in § 1.1273‑1(c)(1)(ii)) at periodic intervals of no more than one year; (3) the bond has a stated maturity date that is not later than 40 years after the issue date of the bond; and (4) the bond includes a qualified tender right.”
[2] Section 1.150-3 defines a qualified tender right as “a right or obligation of a holder of a tax-exempt bond pursuant to the terms of the bond to tender the bond for purchase as described [herein]. The purchaser under the tender may be the issuer, its agent, or another party. The tender right is available on at least one date before the stated maturity date. For each such tender, the purchase price of the bond is equal to par (plus any accrued interest). Following each such tender, the issuer, its agent, or another party either redeems the bond or uses reasonable best efforts to resell the bond within the 90-day period beginning on the date of the tender. Upon any such resale, the resale price of the bond is equal to the par amount of the bond (plus any accrued interest), except that, if the tender right is exercised in connection with a conversion of the interest rate mode on the bond to a fixed rate for the remaining term of the bond, the bond may be resold at any price, including a premium price above the par amount of the bond or a discount price below the par amount of the bond (plus any accrued interest). Any premium received by the issuer pursuant to such a resale is treated solely for purposes of the arbitrage investment restrictions under section 148 of the Code as additional sale proceeds of the bonds.”
Several More Companies Propose Move From Delaware To Nevada
As 2024 closed and 2025 began, four additional publicly traded companies proposed reincorporating from Delaware into the “sweet promised land”* of Nevada. These companies include:
Revelation Biosciences, Inc.
Eightco Holdings Inc.
Gaxos.ai Inc.
Remark Holdings, Inc.
In general, these companies cite tax savings, the enhanced ability to attract and retain management, greater liability protection, and flexibility as the reasons for proposing the move to Nevada. It remains to be seen whether the stockholders favor a move. Moreover, the proxy season is only just beginning and it will be interesting to see whether 2025 will be go down in history books as the “Year of the Great Move”.
__________________________*”Sweet Promised Land” is the title of a wonderful book by Robert Laxalt that tells the story of a Basque immigrant and his son’s return visit from Nevada to the father’s ancestral homeland. I’ve never been sure whether the title refers to Nevada, the Basque homeland, or both. The phrase also makes it appearance in the chorus of a song recorded in Walter Van Tilburg Clark’s semi-autobiographical novel about growing up in Reno, Nevada, The City of Trembling Leaves:
“Oh, this is the land that old Moses shall see;Oh, this is the land of the vine and the tree;Oh, this is the land for My children and Me,The sweet promised land of Nevada.”
The Outlook for US Private Equity in 2025
As we launch into the next quarter century, there is much speculation about what the future holds for private equity (PE) as an asset class and driver in dealmaking. Momentum started to pick up in 2024 with the Fed announcing a series of interest rate cuts, and there was a sense of increasing certainty with the Presidential election now behind us. Now, everyone is eager to see what the new year will hold.
PitchBook analysts have released their 2025 US Private Equity Outlook, examining the trends that could redefine the market. One of the most interesting is the significant shift they are expecting in the IPO landscape this year. Their analysts are looking at the potential for PE-backed companies to capture 40% of all the IPO capital raised on major US exchanges this year. That would be a nearly 10% jump from the decade average, as well as a change in investor preferences.
Their data shows that since 2000, PE-backed companies averaged about 30.6% of IPO capital raised on major exchanges within the past decade, with a high of 54.2% in 2016 and a low of 3% in 2022. PE-backed companies reached approximately a one-third share of all IPOs in 2024, and Pitchbook is expecting that to be even greater in 2025.
In looking at the gains, they point to the focus on growth and profitability for PE-backed companies, as well as stable cash flows and successful capital allocation. They also tend to operate within sectors that have rational pricing and competition, providing predictable returns that make them appealing candidates for IPO investors. Coupled with the impressive stock performance of PE-backed companies recently, this puts them in a prime position for success this year.
There has also been recent coverage indicating that Wall Street banks are preparing for a rebound as bankers and analysts are anticipating a great deal of IPO announcements in the first half of 2025. With several PE-backed firms already filing IPO paperwork, all the speculation might actually come to fruition as PE firms are more eager to begin offloading some of their assets.
We see some risk if major US public market indexes encounter some kind of significant correction, leading to a more negative market sentiment. If this were to occur, the IPO window could close for a period of time until investor confidence returned, meaning PE-backed companies would again have to alter their IPO plans.
There are many factors at play here and a lot of moving parts. Everyone is closely watching to see if the new Presidential administration will loosen regulations, whether punitive tariffs will be imposed, the impact on inflation and interest rates, and what will happen with taxes. But cautious optimism definitely exists, and there does seem to be an opportunity to build on momentum here. We have all been waiting for a real return to IPOs, and 2025 could be the year that finally happens.
Big Law Redefined: Immigration Insights Episode 2 | Navigating US Immigration Law and Tax Complexities for High-Net-Worth Individuals [Podcast]
In this episode of Greenberg Traurig’s Immigration Insights series, host Kate Kalmykov is joined by GT colleague and Tax Practice Shareholder, Erez Tucner, to explore the intersection of U.S. immigration and tax considerations for high-net-worth individuals. They discuss the implications of U.S. tax residency, strategies for tax planning before moving to the United States, and the complexities of the exit tax for those relinquishing U.S. residency. They address the impact of estate taxes and the importance of aligning immigration and tax objectives. Lastly, Kate and Erez talk about individuals navigating the U.S. immigration process and while managing global tax obligations.
Tax Court Reaffirms Soroban Holding that “Active” Limited Partners are Subject to Self-Employment Tax
On December 23, 2024, the Tax Court ruled in Denham Capital Management LP v. Commissioner (T.C. Memo. 2024-114)[1], that limited partners that actively participated in the activities of a fund manager formed as a state law limited partnership were subject to self-employment tax on all of their distributive share of income from the partnership. The Tax Court found that, consistent with its earlier ruling in Soroban Capital Partners LP v. Commissioner, 161 T.C. 310 (2023), limited partners of a state law limited partnership are not automatically entitled to the “limited partner exception” to self-employment tax under Section 1402(a)(13).[2] Rather, a functional analysis test must be applied to determine whether any state law limited partner should be considered a “limited partner, as such”[3] for purposes of the limited partner exception. The Tax Court applied the functional analysis test and found that each of the Denham limited partners’ activities, roles, and responsibilities rose to the level of those of an “active partner,” and therefore the limited partners did not qualify for the limited partner exception.
A similar case challenging the Soroban interpretation of the term “limited partner” in Section 1402(a)(13), Sirius Solutions LLLP v. Commissioner (Docket No. 30118-21), is pending in the Fifth Circuit Court of Appeals. In the meantime, however, the Denham and Soroban rulings have further entrenched the IRS’ position that a limited partner actively participating in a partnership will be subject to self-employment tax.
Our prior summary of Soroban is linked here.
[1] Denham Capital Management LP v. Commissioner (T.C. Memo. 2024-114)
[2] All Section references are to the Internal Revenue Code of 1986, as amended.
[3] Section 1402(a)(13) (which excludes from the definition of “self-employment income” the “distributive share of any item of income or loss of a limited partner, as such, other than guaranteed payments described in Section 707(c) to that partner for services actually rendered to or on behalf of the partnership to the extent that those payments are established to be in the nature of remuneration for those services. . .” (emphasis added)).
EU Taxonomy Developments: EU Platform on Sustainable Finance Call for Feedback on Draft Report on New Activities and Updated Technical Screening Criteria
On 8 January 2025, the EU Platform on Sustainable Finance (PSF) published a draft report and launched a call for feedback on proposed updates to the EU taxonomy. This includes revisions to the Climate Delegated Act and new technical screening criteria. Stakeholders are invited to submit feedback by 5 February 2025.
Key areas sought for feedback include:
Technical Screening Criteria (TSC): Updates to the criteria and Do No Significant Harm (DNSH) requirements to improve usability.
Revised Energy-Related Thresholds: Adjustments to support ensuring consistency and relevance.
Harmonization Efforts: Aligning activity titles and descriptions between Mitigation and Adaptation Annexes.
New Activities and Criteria: Proposals for activities in mining and smelting.
The PSF has noted that the most useful and valuable feedback that can be incorporated should be evidence-based and substantiated, concrete, and explain usability issues or provide recommendations for criteria or usability improvement.
Whilst this is not an official European Commission consultation, part of the PSF’s mandate is to provide recommendations to the European Commission on simplifying the EU Taxonomy and the wider sustainable finance framework. The review of this legislation fulfils the legal requirement to revisit criteria for transitional activities every three years, while continuing to develop technical screening criteria for new activities. The PSF’s Technical Working Group is said to have incorporated usability feedback from targeted stakeholder consultations, but this public consultation is aimed to obtain additional feedback and to further enhance the EU Taxonomy’s usability.