VATupdate Newsletter Week 7 2026

WHISKERS

Cats have extraordinary senses. They can feel things before they’re there. A bit like following VATupdate.com: you just know something is moving in the VAT world before anyone else feels the air shift.

Here are some of last week’s highlights from VATupdate:

ECJ judgments on invoice timing and deduction rights, and on unlicensed music use taxed as a service.
Continued digital expansion and enforcement: Mexico adding more non-resident digital platforms, Chile intensifying tax-fraud crackdowns, and fresh e-invoicing updates in Germany, Ireland, Romania, and others.
The end of duty-free relief for small parcels in the EU by July 2026, plus a new flat-rate customs duty for low-value imports.
The ongoing rollout of EU CBAM, with Spain, Romania, and the UK publishing country-level implementation details.

Sometimes there is so much news, you may wonder if you should just stay in bed. But if you have a cat, that’s simply not an option.

Perhaps you recognise this scene: that gentle, soft touch on your shoulder when you’re waking up. You wrap your blanket tighter, determined to stay warm. But the tugs become more insistent. Followed by a questioning meow, asking (no, demanding) why the food bowl is still empty.

And you know what’s coming.

If you ignore it, the next step will be a set of sharp nails pressed ever-so-carefully into your forehead. The kind of grip that makes you wonder whether to move (and get scratched) or lie perfectly still and pray your partner gets up to feed the tiny tyrant currently holding you hostage.

He sleeps 80% of the day, ignores me for the other 20%, and yet… I adore him. His soft fur, his soothing purrs, and the way he can suddenly leap and sprint across the room as if an earthquake just hit.

And while he’s pretending I don’t exist, his whiskers are hard at work.

Whiskers aren’t just cute accessories. Scientific studies show they’re ultra-sensitive tactile sensors that detect air currents, pressure changes, and spatial cues. Helping cats navigate and “sense” the world even in total darkness. Makes you wonder if he’s not lazy at all but simply equipped with premium hardware the rest of us don’t have.

Now imagine if our VAT system had similar sensory capabilities.

Picture this: a VAT regime with built-in digital “vibrissae”. Not furry ones (HR might object), but the kind that let you feel the slightest shifts in transaction patterns. A system that senses hidden risks, unusual currents in your data flows, and early signs of indirect tax trouble long before the audit light begins to glow.

This is no fantasy.

Across many jurisdictions, tax authorities and indirect tax teams are already turning to predictive analytics and AI to detect anomalies and suspicious patterns before they evolve into full-blown audits. These systems sift through enormous datasets in real time. Much like whiskers picking up imperceptible air currents.

The rise of predictive analytics and AI in VAT risk monitoring is becoming one of the biggest stories in indirect tax. Where we once reconciled returns and waited for red flags, we now anticipate them: spotting risks earlier, reducing false positives, and turning data noise into early-warning signals.

In that sense, VAT systems are beginning to resemble a cat’s sensory array: finely tuned, quietly alert, and able to detect the tiniest shift that signals something deeper.

The only thing missing?

A small furry creature jumping on your keyboard, demanding snacks.

But give it time.

With AI evolving this fast, even that might soon be predictable.

If you have any comments, questions, or ideas that you want to share with us, please send us an email at [email protected] or leave a comment under the posts of this newsletter on LinkedIn.

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