VATupdate Newsletter Week 11 2026

MIXED

Last week, I attended a cocktail workshop. Inevitably, this made me think about VAT. But first, a few highlights from the past week in Europe:

The ECJ confirmed that Member States cannot reject refund claims solely due to formal or technical errors.
In another case, the ECJ ruled that even if an invoice arrives late, the VAT deduction remains valid if the taxpayer acts in good faith.
Belgium released long-awaited guidance clarifying when foreign companies have a Fixed Establishment for VAT purposes.
The UK HMRC announced new targeted controls on marketplaces and gig-economy platforms, with a focus on underreported VAT on services.
Italy updated rules making more businesses jointly liable for VAT fraud in sensitive sectors, particularly logistics, construction, and fuel trading.
In the UK, HMRC decided that ham & cheese croissants are not the same as a bakery product.

A cocktail looks simple: ingredients in, shake, pour, done. At least that’s what Tom Cruise suggested in Cocktail. When I try it, the result is more CSI: Kitchen Unit – juice on the ceiling, sticky floors, and ice cubes from 2019.

But the thing about cocktails is: the mix matters. Shake vs stir. Ice first or last. Add citrus at the wrong time and suddenly you’ve invented a new drink… accidentally.

Sound familiar?

VAT rules have the same chaotic energy.

Change one tiny element in a transaction, an extra service, a happy little transport leg, a sprinkle of digital platform involvement… and boom: the VAT treatment mutates. Zero-rated becomes taxed; taxed becomes exempt; exempt becomes “hmm, let’s analyse the economic reality”; and “economic reality” becomes a long weekend of mixed feelings.

Because in VAT, it’s not just what you mix.

It’s how you mix it.

And, crucially, how the final result is perceived.

You can follow the recipe perfectly and still end up with a tax authority saying: “Interesting. That’s not what we think you made.”

Yet this is exactly why VAT people secretly love it. We get to step into the business “kitchen,” watch how everything comes together, and figure out what the mix actually is: not just what it says on the menu.

Can you do all this from your own home office “bar”?

Sure. As long as you have the right tools, the right steps and someone to stop you from over-pouring the exemption.

And if things get messy (rules changing, acronyms multiplying, systems updating while you’re still reading the manual), well… remember cocktails.

And ham-and-cheese croissants.

And anything else that tastes different depending on how disastrously you mix it.

VAT is always a blend. Sometimes smooth, sometimes strange, always interesting.

Recipes (and remedies) are available at VATupdate.com.

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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