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VATupdate Newsletter Week 17 2026

4 hours ago
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42 min read

KING

King’s Day came and went, and with it a reminder: the King just turned 59. A respectable age—though still a bit older than VATupdate.

But while VATupdate may be younger, it has already earned its crown. When it comes to news on VAT and other indirect taxes, it stands firmly on the throne—undisputed and indispensable.

So, do yourself a favour: make it part of your daily routine. Check VATupdate every day—because staying informed is always in style.

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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WORLD

WORLD

WEBINARS / EVENTS

 

AFRICA

ANGOLA

BURKINA FASO

Finance Law No. 021‑2025/ALT, effective January 1, 2026, extends for one year VAT and customs exemptions for qualifying agricultural purchases, certified e-invoicing systems, and approved strategic investment projects, with specified documentation and ministerial approval requirements and no permanence beyond the 2026 fiscal year.

CAMEROON

Cameroon’s 2026 Finance Law mandates real-time e-invoicing for all transactions via approved e-invoicing systems, including taxable, VAT-exempt, and out-of-scope dealings, as part of wider digital tax reforms.

CONGO

On February 5, 2026, the Finance Ministry reclassified selected essential intermediate and consumer goods, cutting customs duties to 5% and reducing or exempting VAT while banning exports and re-exports of these goods until December 31, 2026.

IVORY COAST

EGYPT

To obtain a VAT refund from the Egyptian Tax Authority (effective July 2023), taxpayers must submit complete required documentation (excluding any VAT included in costs), file within five years of payment, provide a production equation for refunds on exported and locally manufactured goods, and—since July 1, 2023—use non-paper invoices as proof to avoid rejection.

KENYA

From May 2026, KRA will automatically prefill iTax VAT returns with validated iCMS export data (including zero-rated supply values and taxable services) using approved TIMS/eTIMS invoice numbers and the exporter’s PIN provided when lodging export documents in iCMS.

Kenya’s tax authority has directed all fuel stations to update their invoicing and eTIMS systems to apply a temporary 8% VAT on fuel for 90 days (from April 15 to July 14, 2026), after President Ruto signed a VAT amendment reducing fuel VAT from 16% to help mitigate global price pressures.

MOROCCO

Starting 11 June 2026, Morocco will require non-resident providers of electronic services (e.g., streaming, SaaS, cloud, ads, digital consulting) to register for VAT, file quarterly returns, verify customer locations, and keep transaction records for at least 10 years, with no minimum threshold and invoice requirements to support equal taxation of foreign and domestic digital businesses.

NAMIBIA

NIGERIA

Nigeria’s new VAT rules under the Nigeria Tax Act 2025, effective January 1, 2026, broaden input VAT deductions and VAT exemptions/zero-rating, introduce a 5% fossil-fuel surcharge (with exclusions for cleaner energy and household fuels), and tighten compliance by disallowing certain improperly charged VAT/import duty deductions.

SOUTH AFRICA

The 2026 Tax Amendment Act adds a new VAT Act section 44(3)(e) requiring non-resident vendors to submit written banking account details for VAT refunds when they deregister. SARS will not pay these refunds until it receives the required particulars, even if the account is outside South Africa. This is a procedural change meant to enable refunds to non-residents who do not hold South African bank accounts, and it applies to non-resident vendors deregistered under section 24 who were not required to open a South African bank account on or after 24 December 2024.

UGANDA

Parliament passed the 2026 VAT amendment with hotel and tourism investment incentives but rejected an 8% tax on imported software, citing its potential to hinder Uganda’s digital transformation and raise costs.

 

AMERICAS

ARGENTINA

Argentina, through Decree No. 242/2026 effective 13 April 2026, launched the RIMI SME tax incentive offering VAT refunds (with early reimbursement three months after eligible USD 150,000–USD 9 million productive investments) over a two-year enrolment period to support manufacturing, exports, and jobs.

BOLIVIA

BRAZIL

Starting August 3, 2026, Brazil will require businesses to include customers’ addresses on Electronic Consumer Invoices (NFC-e) for all remote sales, prompting system updates to ensure compliance with the updated e-invoicing rules.

BRITISH VIRGIN ISLANDS

The government changed import duty calculations from CIF to FOB by removing charges for insurance and freight to lower import costs and consumer prices.

CANADA

Canada will tighten steel import rules starting Dec. 26, 2025, by cutting tariff-rate quotas for non-FTA and FTA partners, adding a 25% global surtax (plus 50% on over-quota imports) with U.S. and Mexico exempt, and strengthening CBSA enforcement through more audits and specialized compliance measures.

CHILE

Chile’s tax authorities clarified that VAT (not withholding tax) generally applies to cross-border software sublicensing and resale in Chile, with VAT-taxable treatment and possible export-service exemption depending on whether the sublicensing qualifies as an export service.

COLOMBIA

Colombia’s Constitutional Court ruled that an emergency VAT-increase decree was unconstitutional and ordered refunds of VAT collected under it between December 30, 2025, and January 28, 2026, with DIAN required to process refunds through existing or new procedures within 30 days of the decision.

DOMINICAN REPUBLIC

DGII set revised excise tax rates for April–June 2026 and the Superior Administrative Court issued rulings on income tax exemptions for ceased businesses, judicial review without a formal administrative act, and customs assessment procedures.

ECUADOR

Ecuador has introduced a 15% VAT on digital services, requiring VAT withholding by intermediaries for cross-border payments, charging and invoicing by locally registered providers, and self-assessment by users when no compliant intermediary/provider is involved.

UNITED STATES

After the Supreme Court ruled President Trump’s IEEPA customs tariffs unlawful, CBP will accept IEEPA tariff refund claims through the ACE portal starting April 20, 2026, prioritizing unliquidated then appealed entries, requiring applicants to file via the CAPE application and receive refunds via a single bank payment.

The Supreme Court’s 6–3 ruling that the President exceeded IEEPA authority to impose broad tariffs invalidates those tariffs, potentially enabling importers to seek refunds of over $166 billion while U.S. agencies develop an administrative process and consider replacement tariff measures.

VENEZUELA

Venezuela’s Decree No. 5.293 exempts VAT and customs duties on passengers’ luggage entering from the Paraguaná Investment Zone or the Free Port of Nueva Esparta for qualifying goods valued up to 3,000 times the central bank’s highest exchange rate, effective 20 March 2026 through 20 March 2031, subject to the zones’ specific rules.

 

ASIA-PACIFIC

AUSTRALIA

A U.S. Supreme Court ruling invalidated IEEPA emergency tariffs and triggered a rush of duty refunds while a new 10% global tariff under Section 122—despite the Australia-U.S. FTA—imposed fresh costs on Australian exporters, leaving businesses to quickly file refunds and rework compliance and supply chains amid uncertainty.

AZERBAIJAN

In Nakhchivan, Azerbaijan’s “Return VAT” project has been implemented successfully, increasing VAT refunds to consumers by 28.8% to 475,200 manats in Jan–Mar 2026, with about 4.6 million manats refunded since launch.

BANGLADESH

Businesses say Bangladesh’s online VAT return system still suffers frequent technical errors, mismatches, verification and approval delays that push some back to manual filing, prompting calls for NBR action to fix glitches, streamline approvals, hold officials accountable, and address customs-benefit misuse.

CAMBODIA

CHINA

China has enacted two new supply chain regulations that raise legal risks for multinationals, including potential personal liability for managers in China who follow Western sanctions that conflict with Chinese law. Companies must quickly review China-related contracts and supply chain practices, as the rules tighten restrictions on information gathering and cross-border data transfers.

GEORGIA

INDONESIA

The tax authority says VAT on toll road services is still being reviewed and has not been implemented yet. The idea is included in Indonesia’s 2025–2029 tax strategy, and any decision will require extensive analysis, cross-ministry coordination, and evaluation of public impact to ensure fiscal sustainability and legal certainty, following orders from the Finance Minister.

JAPAN

Japan’s 2026 consumption tax (JCT) reform ends the JPY 10,000-or-less exemption for low-value imports, expands platform-led JCT collection to goods sales from April 1, 2028, and shifts JCT liability to platforms for large transactions (over JPY 5 billion).

KAZAKHSTAN

Proposed amendments to the tax code aim to restore VAT exemption for factoring transactions, which are currently subject to VAT.

MALAYSIA

In Malaysia, IRBM/LHDN e-invoicing rules require businesses to issue electronic invoices for B2B, B2C, and B2G transactions (including related sales and income), and for B2C purchases/foreign-seller transactions to ensure e-invoices are available as proof of taxable income and spending evidence for both purchases and adjustments like returns and discounts.

NEW ZEALAND

New Zealand Inland Revenue is consulting on a draft interpretation statement that would apply a 9% GST effective rate to qualifying long-stay commercial accommodation by reducing the taxable value under the reduced value rule, with the consultation ending 29 May 2026.

PAKISTAN

Philippines

SINGAPORE

South Korea

  • South Korea Considers Extending VAT Deductions for Small Restaurant Owners to 2029

SRI LANKA

TAIWAN

THAILAND

Thailand’s proposed VAT increase from 7% to 10% is intended to support economic stability and strategic investment, marking a shift from maintaining a low-cost image to delivering value-driven confidence despite fears of higher living costs.

UZBEKISTAN

VIETNAM

Vietnam’s Ministry of Finance is proposing streamlined e-invoicing rules—allowing platform-operator invoicing and consolidated/bulk invoices for certain sellers—while expanding mandatory e-invoicing from December 2025 for businesses over VND 1 billion and requiring unregistered firms to declare and pay tax before receiving coded invoices under Circular 32/2025.

 

EUROPE

EUROPE

In 2026, European countries apply VAT—a consumption tax paid through the supply chain but ultimately borne by consumers—at varying (though somewhat harmonized) rates across the EU, ranging from 17% in Luxembourg to 27% in Hungary, with reduced rates and exemptions often used but criticized as inefficient compared with direct income support.

EUROPEAN UNION

Transfer pricing and VAT increasingly overlap in intra-group cross-border transactions, and ECJ case law requires VAT to apply to transfer pricing adjustments only when there is a direct link to an identifiable service, making careful structuring and transfer pricing method selection crucial to avoid tax risks and disputes.

In 2023 the EU’s VAT gap rose to 9.5%, with €128 billion in lost VAT revenue driven by fraud, errors and policy exemptions, and the report calls for digital tools and better cross-border data sharing to reduce both compliance and policy gaps.

The 51st GFV meeting on 3 March 2026 focused on implementing the ViDA package—covering explanatory notes for the platform economy and Single VAT Registration changes—clarifying scope, VAT obligations, terminology, transitions and platform deemed-supplier roles and requested written real-life examples by 24 March 2026 while introducing draft SVR/OSS guidance for 1 January 2027.

EUROPEAN COURT OF JUSTICE

The ECJ’s AG Opinion in C‑321/25 (Gidzhinov) holds that EU law—including Article 325(1) TFEU and obligations under the PFI Framework—does not preclude national rules that (1) impose limits such as a limitation period for prosecuting serious VAT fraud and (2) provide for higher penalties where fraud involves “agreement”/coordinated conduct. The AG considers these national measures compatible with the requirement to combat fraud affecting the EU’s financial interests through effective, deterrent penalties, and with the principle of proportionality.

The EGC’s AG Opinion in T-268/25 (Sampension Livsforsikring) holds that a national rule requiring 100% ownership to form a VAT group is permissible under Article 11 of the VAT Directive if it is proportionate and specifically aimed at preventing tax avoidance/evasion.

In case T-233/25 (Mokoryte), the EGC held that a subcontractor who acquires an unpaid assigned claim from an insolvent developer may not adjust VAT (reduce the taxable amount under Article 90(1)) when the claim is irrecoverable and no payment is received.

ALBANIA

Law No. 79/2025 requires coastal tourism businesses to use POS terminals for electronic payments and restrict cash transactions to 100,000 lek between businesses and 500,000 lek to individuals, with larger payments made via card or bank transfer to modernize payments and reduce cash use.

AUSTRIA

The Austrian Supreme Administrative Court held that VAT may be charged on telecommunication roaming services actually used and enjoyed in Austria, despite an ITR (Melbourne) agreement and even where non-EU operators provide them to non-EU customers, aligning with the CJEU’s SK Telecom precedent on taxation by place of actual use.

BELGIUM

Belgium will roll out a major VAT reform effective May 1, 2026, centred on digitalization and transparency. The current VAT current account will be replaced by a new VAT provision account that consolidates VAT credits and debts and provides real-time visibility through MyMinfin. Payment handling will be streamlined, but until later, VAT payments will still use existing bank accounts while new VAT-dedicated accounts are introduced. The temporary summer VAT exemption that extended deadlines will be removed, and VAT filing deadlines will stay the same throughout the year. VAT refunds will be restricted to amounts declared in specific boxes on periodic VAT returns.

BOSNIA AND HERZEGOVINA

Bosnia and Herzegovina’s Federation has passed a fiscalization law requiring e-invoicing (EN 16931 with e-signatures and QR/verification) and near-real-time reporting to the Central Fiscalization Platform/ETRS for most B2G, B2B, and B2C transactions starting February 12, 2026, with implementation over 18 months and penalties from EUR 1,530 to EUR 15,300.

Bulgaria

From 1 January 2026, Bulgaria will end the reverse-charge VAT treatment for EU suppliers’ supply-and-installation contracts, requiring them to VAT-register in Bulgaria, charge 20% Bulgarian VAT, and report it in Bulgarian VAT returns.

CROATIA

Croatia is seeking emergency powers to let the government temporarily change VAT rates on energy products via decree during market crises without prior parliamentary approval.

CZECH REPUBLIC

From January 1, 2026, the Czech Republic will let eligible non-EU businesses claim VAT refunds on certain intra-EU acquisitions and imports without VAT registration or reciprocity, provided the goods are used for Czech taxable supplies under the reverse-charge B2B rules.

DENMARK

Teaching a specific dance style is subject to VAT in Denmark because it is not broad enough to qualify as general school education or as a cultural VAT-exempt service, though VAT may be exempt when provided to youth under 30.

FINLAND

FRANCE

France Publishes the New Customs Code: Ordinance n° 2026‑265 and Decree n° 2026‑266 Adopted

France’s tax authorities clarified that VAT on dropshipped goods not covered by the IOSS depends on the entry point into the EU and whether the goods are valued above or below €150, including how import VAT is allocated between the seller and French consumers for imports into France.

The French Supreme Court held that a customs broker is only jointly and severally liable for import VAT when it has been expressly appointed as an indirect representative, rejecting any presumption of indirect representation from circumstances.

GERMANY

A supplier must verify and document the buyer’s valid foreign VAT ID for each intra-Community supply to qualify for VAT exemption, but German courts may still grant “legitimate expectations” protection (Vertrauensschutz) even if the supplier didn’t make a qualified confirmation query before every delivery.

In Germany, small businesses are exempt from issuing e-invoices but must be able to receive, process, and store structured digital invoices starting January 1, 2025, while mandatory e-invoicing for larger firms starts in 2027 and applies to all businesses in 2028.

The German Federal Fiscal Court held that input VAT on advertising services is not deductible in Germany when the services benefit a non-EU head office rather than a German fixed establishment, making the invoice VAT not legally due in Germany because the place of supply lies outside Germany.

GREECE

Greece clarified that telemedicine with therapeutic purposes is VAT-exempt (unlike unrelated advisory services) and introduced a special, usage-based input VAT deduction method for immovable property used for both taxable and non-taxable activities, with separate accounting, prior approval, and retroactive claims due by April 30, 2026.

HUNGARY

From September 1, 2026, Hungarian fuel retailers must add mandatory end-of-item fuel type codes (#NB#, #PB#, #NG#, #PG#) to receipts and invoices so real-time reporting can be validated for compliance, with penalties for nonconformance.

ITALY

The 2026 Italian VAT reform updates the rules for calculating the taxable base in barter transactions to align with EU Directive 2006/112/EC, replacing the previous “normal value” (market price under free competition) criteria.

Invoices and import bills received in 2025 must be registered by April 30, 2026, to claim VAT deductions, which are allowed no later than the VAT return for the year the right arose.

Influencers must determine whether their content-creation activity is habitual and organized (which triggers VAT registration and possible partita IVA regardless of income thresholds) or merely occasional (typically without VAT obligations), with VAT treatment varying by whether they act as a freelancer, business, or occasional worker and also considering non-cash compensation and digital reporting rules like DAC7.

LATVIA

Latvia’s Finance Ministry says it cannot reduce VAT on gasoline or diesel because EU VAT directive rules require a standard VAT rate for fuel, leaving no legal basis for a reduced rate. Although some countries have temporarily cut VAT, the European Commission considers such measures to violate EU law, so Latvia is instead collaborating with stakeholders to cushion energy price shocks.

LUXEMBOURG

MALTA

This guide summarizes Malta’s fiscalization framework by outlining the legal and regulatory requirements, certified fiscal devices and POS setup, required receipt documentation and content, and the procedures for registration, archiving, audits, enforcement, and penalties.

MOLDOVA

Moldova will end the 8% VAT rate on medical devices and reinstate the standard 20% VAT starting May 1, 2026, as the reduced rate failed to lower prices.

NETHERLANDS

The case concerns whether online typing courses for primary school pupils—provided by a CRKBO-registered provider—are VAT-exempt as vocational training, despite the tax inspector imposing additional 21% VAT assessments for 2016, 2019, and 2020.

NORWAY

Norway is consulting VAT rule changes effective July 1, 2026, to let multinational groups report VAT on cross-border remote services using budgeted allocations with later reconciliation, while expanding input VAT recovery for foreign establishments and adjusting reverse-charge requirements for fully deductible use.

POLAND

The VAT case shows that procedural missteps by tax authorities—not the merits of the tax assessment—can decide the dispute. The authorities delayed proceedings and pursued criminal-fiscal action as a tactic to keep VAT liabilities from becoming time-barred. The taxpayer’s team leveraged procedural safeguards, challenged inactivity and delays, and successfully forced dismissal of the complaint. The lesson is that mastery of procedural rules can be decisive in tax litigation.

ROMANIA

Romania’s High Court has ruled that companies may carry forward negative VAT balances indefinitely, resetting the statute of limitations with each monthly VAT filing, which lets media and entertainment businesses reclaim older VAT and provides greater financial certainty consistent with EU VAT neutrality principles.

RUSSIA

SERBIA

Serbia has expanded its VAT refund reciprocity list by adding France, Bulgaria, Luxembourg, and Sweden, enabling eligible non-resident businesses from those countries to claim refunds of Serbian VAT under specified conditions.

Slovakia

  • Slovakia to Raise VAT Registration Threshold to €85,000 from July 2026

Slovakia intends to raise the VAT registration threshold to €85,000 starting July 1, 2026, pending parliamentary approval, to lower administrative and compliance burdens on small businesses and support competitiveness, new business formation, and employment.

SPAIN

The Spain Supreme Court held that mixed holding companies’ intragroup share transfers are VAT-exempt financial activities (so related input VAT is not deductible), except for transfers meeting strict conditions involving an autonomous economic unit capable of independent operation.

The Madrid High Court held that taxpayers’ right to offset VAT credits is an autonomous entitlement (not a voluntary tax option), and that errors in the VAT return can be corrected within legal limits even after the filing deadline to include compensable amounts.

SWEDEN

Switzerland

Switzerland’s VAT refund process for foreign companies has changed as of February 26, 2026, requiring a tax status certificate covering the entire calendar year and proof of VAT registration or liability starting dates, with incomplete documentation leading to rejection or delays.

TURKEY

UKRAINE

When Ukraine’s tax authority requests it, large taxpayers must electronically submit the SAF-T UA file through their Electronic Cabinet private section within two working days, uploading and signing it and ensuring it passes technical (XSD) and logical validations, with outcomes sent via a second receipt.

UNITED KINGDOM

The EV industry is outraged that HMRC has appealed a VAT ruling that could have cut public EV charging tax rates from 20% to 5%, arguing the appeal preserves a costly two-tier system that unfairly penalizes people without home charging access.

The First-tier Tribunal held that VAT on Clearwater Hampers’ food-and-drink hampers should treat the lidded wicker baskets as ancillary, applying a composite VAT rate based on the relative values of the included standard-rated and zero-rated food and drink items.

 

MIDDLE EAST

BAHRAIN

UNITED ARAB EMIRATES

Comarch has been approved as an FTA-accredited service provider for the UAE’s e-invoicing mandate, enabling compliant Peppol-based transactions through the DCTCE framework ahead of the January 2027 deadline.

The UAE Ministry of Finance has mandated phased e-invoicing for virtually all transactions (B2B/B2G/G2B/G2G) starting July 2026, requiring businesses to use an approved Accredited Service Provider and comply with specified invoice fields and guidelines, with limited exclusions and administrative penalties for noncompliance.

 

 

 

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