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VATupdate Newsletter Week 18 2026

1 week ago
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38 min read

 

LAZY

Here’s the thing: solving a problem efficiently is surprisingly hard. That’s why there’s an old saying that if you want something done with the least possible effort, give it to the laziest person in the room. They’ll find a way. Maybe it won’t be pretty. Maybe it won’t be moral. But it will be efficient.

It’s the same logic behind the idea that a military ship should only employ sailors who cannot swim. Their motivation to defend the vessel is unmatched. If that hull so much as creaks, they’re not merely protecting national security: they’re protecting their ability to not drown before lunch.

And honestly, I get it. I’ve been in situations where my “efficiency instincts” suddenly flare up. For example: when carrying 11 grocery bags in one trip because the alternative is walking back to the car. Or using the back of a spoon as a screwdriver because the toolbox is two floors away. Or telling myself that gravity is a valid filing system for the stack of papers on my desk.

But laziness (sorry: resource optimisation) isn’t always such a bad thing. Sometimes less effort is more cleverness. And sometimes the “lazy solution” is the correct strategic answer… which brings us neatly, if reluctantly, to VAT.

If there is one field where lazy solutions tend to backfire spectacularly, it is VAT.

VAT has this cheerful tendency to look easy until you’re ankle-deep in exceptions, definitions, presumptions and a court case from 1988 that suddenly becomes relevant again because your “simple workaround” actually triggered the full wrath of the Directive. Lazy may work for assembling IKEA furniture, but it does not work for:

  • deciding whether something is a supply of goods or services,
  • determining if a fixed establishment exists,
  • declaring intra-EU acquisitions,
  • or explaining to a tax inspector why your compliance strategy mainly consisted of “hoping it wouldn’t matter.”

In VAT, lazy solutions are often like using a chocolate teapot: charming in theory, catastrophic in practice.

Efficiency, however, is a different story. Efficient VAT systems and efficient VAT compliance do exist. But they require the opposite of laziness: they require effort upfront, so you don’t suffer later.

Take digitalisation. Governments didn’t implement e-invoicing and real-time reporting because they love XML. They did it because it reduces fraud, increases revenue, and (eventually) makes life easier for businesses (after the initial pain, swearing and printer-related trauma).

Or take case law. Many ECJ rulings are, in essence, Europe’s way of saying: “We know you tried the lazy workaround. We saw it. Don’t do that again.”

This is how we slowly build a system that works better. Not because anyone was lazy, but because someone, somewhere, tried to be.

Imagine that VAT compliance is the ship. Imagine that your organisation is full of sailors who can, in fact, swim.

Well… they might not mind a few holes in the hull. They might be okay with “near compliance.” They might even say things like “We’ll fix it if the auditor ever asks.”

But your VAT function shouldn’t rely on volunteers with life jackets.

You need sailors who defend the ship because they understand what happens when it sinks: penalties, interest, reputational risk, and that awkward conversation where someone says “We thought you were handling this.”

The VAT-compliant organisation is the one where people don’t rely on laziness or luck, but on clarity, structure, and actual rules.

So, what’s this week’s moral?

Laziness can be a brilliant shortcut in daily life. But not in VAT. Never in VAT.

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.

To go directly to the region, click below:

 

WORLD

WORLD

 

Permanent establishment (PE) determines when a foreign business creates corporate income tax liability in a country, while fixed establishment (FE) determines VAT/GST liability by defining whether the business has a sufficient, stable presence for consumption tax purposes.

“From Invoice to Intelligence: E‑Invoicing & E‑Reporting Explained” is a work-in-progress, practical newsletter series that walks professionals through the seven key areas of e‑invoicing and e‑reporting—why governments implement them and how they impact everyday invoicing, VAT reporting, compliance, archiving, and analytics.

The EY E-invoicing Developments Tracker has been periodically updated through 22 April, adding new country coverage for Guyana, Albania, Mongolia, Chad, El Salvador, and Barbados while incorporating amendments for multiple countries including Slovakia, Belgium, Bolivia, Poland, Romania, Norway, and Spain.

 

WEBINARS / EVENTS

 

 

AFRICA

ANGOLA

Angola’s tax authority has waived 2025 SAF-T filing penalties due to new invoice-rule complications, making SAF-T voluntary for 2025 but mandatory (with penalties) from the 2026 financial year.

 

BENIN

 

BOTSWANA

Botswana has suspended fuel and road levies for six months to ease economic pressure by helping consumers and businesses amid rising global fuel prices.

 

IVORY COAST

Côte d’Ivoire’s tax authority (DGI) has renewed for the 2025–2026 coffee-cocoa campaign an administrative VAT suspension covering five sector operations to prevent costly structural VAT credits, while noting that legally exempt items remain unchanged and any previously collected VAT must still be remitted.

 

DEMOCRATIC REPUBLIC OF CONGO

 

EGYPT

Egypt is implementing a multi-phase tax reform strategy, shifting from punitive enforcement to compliance-focused measures to integrate the informal economy and attract investment. The second “Tax Facilitation Package” (Nov. 2025) centres on incentives for compliant taxpayers, faster VAT refunds, investment and corporate benefits, improved dispute resolution, and tax digitalization—using transparency and streamlined processes as a competitive advantage to spur economic growth.

 

GHANA

 

KENYA

Starting May 2026, Kenya’s KRA will pre-fill VAT returns with validated import/export data from the iCMS system as customs export documents are issued, building on earlier pre-filled returns for November 2024 based on e-invoicing TIMS data.

 

LIBERIA

Liberia will raise its GST rate from 12% to 13% effective May 1, 2026, under the Tax Amendment Act, with telecommunications and exports unchanged, alongside tighter compliance and enforcement measures.

 

MAURITIUS

Starting 1 January 2026, Mauritius will require foreign providers of specified digital/electronic services with no permanent establishment to charge and remit 15% VAT on sales to Mauritius customers, with customer location determined by multiple indicators and B2C handled by supplier collection and B2B potentially via reverse charge, alongside new VAT registration and filing obligations.

 

MOROCCO

 

NAMIBIA

Namibia has delayed its mandatory e-invoicing rollout from April 2026 to a phased implementation between 2026 and 2029 to improve technical readiness and stakeholder/infrastructure alignment as part of broader VAT reforms.

 

NIGERIA

Nigeria’s phased e-invoicing rollout will enhance VAT and cross-border enforcement by enabling real-time transaction data and continuous controls, though pending guidance for non-resident/digital suppliers may initially leave some compliance uncertainties.

 

SOUTH AFRICA

The 2025 VAT amendments effective 1 April 2026 redefine “insurance” and “premium” for short-term insurance, requiring VAT analysis based on whether there is direct consideration for cover (including third-party or subsidised payments) and potentially affecting complimentary cover, premium holidays, discounts, embedded cover, and outsourced distribution models.

 

UGANDA

ZAMBIA

ZIMBABWE

Zimbabwe raised VAT from 15% to 15.5% and introduced new import and compliance rules, including requirements for accounting VAT on imported services in foreign currency.

 

 

AMERICAS

BOLIVIA

Bolivia’s tax authority (SIN) has rolled out a nationwide real-time electronic invoicing system (SFE) requiring invoices to be cleared at issuance, with phased adoption since 2021 and final mandatory coverage for remaining taxpayers—mainly SMEs—by October 1, 2026.

 

BRAZIL

Brazil’s SINIEF Adjustment No. 14/2026, effective June 1, 2026, cuts the NF-e recipient confirmation deadline from 180 to 90 days, after which invoices are automatically confirmed—raising compliance pressure and the need for tighter controls.

 

CANADA

On April 28, 2026, Prime Minister Carney released the Spring 2026 Economic Update, his government’s first economic statement, reaffirming previously announced tax measures including new GST/HST rules and a reverse charge mechanism for certain telecommunications supplies.

 

CHILE

 

COLOMBIA

 

ECUADOR

Starting June 2026, Ecuador’s SRI will require taxpayers to electronically file VAT returns and pay simultaneously, with certain VAT refund system “active” exporters and direct suppliers temporarily exempt until updates are finished, under Resolution No. NAC-DGERCGC26-00000016 effective April 15, 2026.

 

GRENADA

Grenada’s 2026 VAT (Amendment) Bill would impose VAT on foreign digital service providers, covering areas like streaming, software, cloud services, and digital subscriptions, with the government arguing it levels the playing field and supports national development. The opposition says it could raise costs—particularly for youth, students, and small businesses—amid wider tax modernization and the push to use the GTAX online platform.

 

JAMAICA

 

PERU

Peru has launched a Private Special Economic Zones (ZEEP) program granting private investors up to 25 years of phased corporate tax breaks, VAT exemptions on certain transactions, and streamlined customs and trade rules for approved activities like manufacturing, logistics, technology, and export services.

 

SAINT VINCENT AND THE GRENADINES

The IMF urged St. Vincent and the Grenadines to keep VAT rates steady due to high public debt by eliminating the special tourism VAT and unifying it with the standard rate, while avoiding broad tax cuts and instead expanding VAT coverage to digital and remote services to support fiscal stability.

 

UNITED STATES

Alabama Act 2026‑604 temporarily suspends the state portion of sales/use tax on qualifying food items from May 1 through June 30, 2026 (using the federal SNAP definition), while local taxes continue, requiring retailers to adjust systems and report qualifying sales separately for the state exemption.

The Colorado Appeals Court held that Netflix streaming subscriptions are taxable as tangible personal property under Colorado sales-tax law, reversing an earlier ruling that found them not taxable.

Missouri’s Department of Revenue ruled that ice sold through vending machines qualifies for the reduced sales tax rate applicable to food products intended for home consumption, not the higher restaurant tax rate.

 

 

ASIA-PACIFIC

CAMBODIA

Cambodia will cut VAT on gasoline and diesel from 10% to 4% starting March 20, 2026, to ease the tax burden on petroleum products, with guidance issued for invoicing, tax calculation, and e-filing.

 

CHINA

China has reported a sharp rise in VAT refund transactions for departing tourists after rolling out a nationwide policy that provides instant tax refunds at the time of purchase; the instant VAT refund service began one year ago.

 

INDIA

Finance Act 2026 extends the validity of Customs advance rulings to five years, removes the INR 10 lakh courier-export cap to aid MSMEs and e-commerce, and reclassifies Section 28 voluntary settlement amounts from “penalty” to “charge” to improve audit and compliance outcomes.

 

INDONESIA

 

KAZAKHSTAN

 

MALAYSIA

Malaysia’s Royal Malaysian Customs Department issued Public Ruling No. 1/2026, effective 31 March 2026, requiring consistent use of approved exchange rate sources when issuing foreign-currency sales and service tax invoices, with approvals needed for unlisted sources and penalties for noncompliance.

 

PHILIPPINES

 

SOUTH KOREA

The Supreme Court held that floral decorations for hotel wedding venues are taxable supply of services (not VAT-exempt supply of goods), since the parties’ intent is to create a decorated setting rather than transfer ownership of flowers—even if flowers are later distributed to guests.

 

UZBEKISTAN

 

 

EUROPE

EUROPE

 

EUROPEAN UNION

As of 10 April 2026, the EU’s Entry/Exit System is fully operational across 29 Schengen countries, using biometric data to replace passport stamping and better enforce the “90 days in 180” rule, though its rollout has initially caused major airport delays and missed flights.

 

EUROPEAN COURT OF JUSTICE

In ECJ VAT case C-544/24 (Nekilnojamojo turto valdymas), the Court held that a national system imposing a fixed late-payment interest/penalty component for VAT arrears, regardless of the infringement’s nature or severity, is permissible under Article 273 and does not breach the proportionality principle.

 

EUROPEAN UNION – ViDA

Peppol adoption across Europe is accelerating as EU ViDA and national mandates drive a shift to mandatory structured e-invoices for all intra-EU B2B/B2G trade by 2030, with countries like Belgium (from Jan 1, 2026) and France (starting Sep 2026, then SMEs in 2027) using Peppol and certified platforms to standardize and ensure compliance.

 

ALBANIA

 

AUSTRIA

Austria’s Supreme Administrative Court ruled that VAT on mobile roaming services depends on where the service is physically used in Austria, so non‑EU operators supplying roaming to non‑EU customers must handle Austria’s VAT obligations regardless of where the operator is located or what international telecom agreements say.

Austria’s finance ministry issued guidance following a court decision confirming that VAT exemptions for intra-EU (Austria-to-Germany) supplies can stand when the goods are actually transported, even if order/transport documentation has minor formal defects.

 

BELGIUM

Belgium’s delayed VAT chain reform and related procedures will take effect on 1 May 2026, replacing the VAT current account with a VAT provision account, introducing new VAT bank account numbers, abolishing the “tax holidays” postponement regime (with limited Q1 2026 exceptions), and updating key filing, payment, and intracommunity list rules.

 

BOSNIA AND HERZEGOVINA

 

CROATIA

 

CYPRUS

 

CZECH REPUBLIC

EET 2.0 will take effect in 2027 and modernize sales registration by automating standardized data collection for both individuals and companies while reducing administrative burdens through a single registration regime and fewer required data points, alongside limiting enforcement actions. It also updates income tax (new/returning credits, small taxpayer opt-out, hospitality tip exemptions, revised employee benefit rules) and adjusts VAT rules.

 

DENMARK

Denmark’s National Tax Court ruled that transferring undeveloped building plots is subject to VAT, and that issues about the VAT base and exclusion of specific costs relate to calculating consideration rather than to VAT applicability.

 

ESTONIA

 

FRANCE

France will end one-off fiscal representation for VAT Regime 42 in 2026, requiring non-EU sellers to get their own French VAT registration and use an accredited fiscal representative—noncompliance can cause customs delays and marketplace account suspensions.

 

GERMANY

 

GREECE

 

HUNGARY

Hungary’s e-invoicing in 2026 centres on Real-Time Invoice Reporting (RTIR) (with electricity and natural gas for non-private customers mandated from July 1, 2025, and broader receipt data reporting from September 1, 2026), requiring compliant electronic invoice/receipt handling and legal e-invoice conditions including authenticity, integrity, and legibility.

 

IRELAND

 

ITALY

LITHUANIA

This document provides an up-to-date legal commentary on Lithuania’s Value Added Tax (VAT) Law, in effect from May 1, 2004, reflecting the current version as of April 29, 2026.

 

MALTA

 

NETHERLANDS

The District Court of Gelderland held that online typing skills courses are not VAT-exempt as vocational education because they lack a sufficiently direct link to a specific profession or subject, so the standard 21% VAT rate applies.

From 1 May 2026, the Dutch Tax Authorities will switch VAT payment bank details from ING to Rabobank (NL04 RABO 0200 1122 44, BIC RABONL2U/RABONL2UXXX), so businesses with manual or stored VAT payment instructions should update their records (no change needed for iDEAL/Wero/Mijn Belastingdienst Zakelijk or direct debit).

 

NORTH MACEDONIA

 

NORWAY

 

POLAND

The case assessed whether a 0% VAT rate can apply to an advance payment for exported goods when the export confirmation is obtained after the tax documentation deadline. DKIS rejected the company’s view that confirmation within six months of the advance is enough, holding that both the export and obtaining the export confirmation documents must meet the statutory timing requirements.

Poland has published a draft VAT Act to transpose the EU’s ViDA package, with changes largely effective from January 1, 2027, including updated e-commerce OSS rules, expanded deemed-supplier treatment, revised distance-sales thresholds, and broader/streamlined OSS and IOSS registration and scope.

 

RUSSIA

 

SERBIA

 

SLOVAKIA

 

SPAIN

Spain opposed an EU bill to share VAT data with anti-fraud agencies, arguing the text needs changes and risking the measure’s approval because all 27 member states must unanimously back it.

 

SWITZERLAND

 

TURKEY

 

UKRAINE

 

UNITED KINGDOM

The FTT dismissed Mr Butt’s appeal, upholding his director’s liability for the VAT input denial penalty by finding he had blind-eye (or at least means of) knowledge of Quantum’s transactions being linked to VAT fraud under the Kittel principle.

HMRC accepted the Court of Appeal ruling that public funding for further education is third‑party consideration for VAT purposes (not outside-scope grants), will consult before making any policy changes, and will apply VAT changes prospectively for non-adopters while requiring ongoing compliance for those already treating the funding as third‑party consideration.

 

MIDDLE EAST

LEBANON

Budget 2026 introduces a 1.5% advance tax on imports for non-compliant taxpayers, extends the VAT periodic return/payment deadline to one month, and sets an LBP 200 million minimum threshold for VAT refund requests (excluding de-registration refunds).

 

OMAN

Oman will begin mandatory e-invoicing in a phased rollout from April 2026 via the OTA’s Fawtara portal, requiring businesses to upgrade systems, ensure data quality, adopt Peppol-aligned standardized formats, and use accredited providers to electronically validate, submit (including real-time B2B), and report invoices to the OTA.

 

QATAR

SAUDI ARABIA

Saudi Arabia is rolling out mandatory e-invoicing and e-reporting for all businesses through ZATCA’s Fatoora platform—starting with UBL 2.1 e-invoices and progressing to ZATCA-validated B2B/B2G clearance and QR-based B2C reporting—with new coverage expanding via Waves 23 and 24 starting in 2026.

 

UNITED ARAB EMIRATES

UAE businesses must choose an accredited e-invoicing provider via EmaraTax by 2026–2027 deadlines, ahead of mandatory PEPPOL-based B2B/B2G e-invoicing that starts compliance in 2027 and will streamline VAT return pre-population and refund processing.

 

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