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VATupdate Newsletter Week 19 2026

5 days ago
309 views
30 min read

MAYO

I overheard two colleagues at the coffee machine having what can only be described as shower thoughts in the wild.

One asked, with deep philosophical seriousness: “Why doesn’t mayonnaise come in cans?”
The other, equally confident and equally wrong, replied: “Because you can’t microwave metal.”

I paused. Took a sip of my coffee. Considered my life choices. Then announced: “Good morning to everyone… except those two people.”

But as I walked away, I found myself thinking: wouldn’t it actually be great to think like that?

Not about microwaving metal mayonnaise—please don’t. But about making strange, unexpected, unnecessary connections. Thinking wildly out of the box. Taking two unrelated concepts, jamming them together, and seeing what happens.

And then I realised: That is literally what I do all the time. Except… I do it with VAT.

VAT, despite what some people think, is not a tidy, linear, sensible system. It’s messy. It’s full of exceptions. And the rules often come from someone, somewhere, making an odd conceptual leap and deciding it should apply to everyone in the EU.

In fact, VAT is basically mayonnaise in a can:

  • It doesn’t make sense at first sight.
  • Everyone has opinions about it.
  • And if you heat it up too quickly, things explode.

But that’s why creative, silly, “please stop talking” thinking actually helps.

Because the only way to understand VAT is to connect weird dots:

“Is a live-streamed yoga class a service, a digital service, or an electronically supplied service?”
“If I move my stock from Germany to Poland, did I just supply something to myself?”
“If I can’t microwave metal, can I still apply the reverse charge?” (Yes, though the reverse charge may also cause emotional sparking.)

VAT is a system where imagining unlikely scenarios is not only allowed but required. So maybe we should all embrace the mayonnaise-in-a-can way of thinking. Ask the questions that sound stupid. Make connections that no reasonable person would make.

Because somewhere between absurdity and regulation is where VAT actually lives.

After all:

  • The rules for vouchers exist because someone one day said, “What if someone pays now but gets something later? Or maybe never?”
  • The distance-selling thresholds became OSS because someone thought: “What if we stop making 27 people cry and instead make only one person cry?”
  • And the recent ViDA proposals? Pure mayonnaise-in-a-can energy. Brilliant and confusing simultaneously.

So, here’s my advice this week:

Think weird. Think impractical. Think creatively. Because the next time someone asks a question that makes the rest of the office go quiet, you may just have discovered the next VAT rule.

Or at least a topic for your next VAT-blog.

 

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:

TABLE OF CONTENTS:

 

WORLD

WORLD

VAT grouping lets affiliated companies be treated as one VAT taxable person so intra-group charges are disregarded and VAT filing is consolidated to reduce unrecoverable VAT and simplify compliance, but it also creates significant joint liability and complex cross-border VAT risks under differing country rules.

WEBINARS / EVENTS

 

AFRICA

EGYPT

Egypt’s tax authority says VAT refund requests must be filed within five years from the date of payment, or the refund claim cannot be made.

GHANA

KENYA

MALAWI

The Malawi VAT Amendment Bill 2026 proposes imposing VAT on non-resident digital services, raising the VAT registration threshold to K50,000,000, introducing new exemptions/zero-rating and expanded definitions for digital service providers, and is included in the 2026/27 budget measures.

MOROCCO

Morocco will implement a phased nationwide e-invoicing system in 2026, beginning with B2B transactions using UBL-based real-time validation and secure data exchange, with consumer invoicing added later.

NAMIBIA

NIGERIA

RWANDA

Rwanda has introduced an 18% VAT requirement for non-resident suppliers of digital goods and services sold to local consumers, requiring VAT registration (or a local representative) within three months and charging VAT on a wide range of online offerings.

SOUTH AFRICA

ZAMBIA

 

AMERICAS

ARGENTINA

ARCA has introduced a fully digital VAT-refund system for foreign tourists in Argentina that uses electronic receipts and online validation with digital controls at departure to speed refunds and improve traceability, replacing the prior regime under Resolution 5843/2026.

BRAZIL

Brazil’s shift to a dual VAT system (CBS federal and IBS state/municipal) from 2026–2033 will require non-resident sellers with Brazilian-taxable nexus—across imports and cross-border services/intangibles—and digital platforms selling to Brazilian customers to register and comply with the new indirect tax rules, first under test-year rates in 2026 and with full rates starting in 2027.

CHILE

COLOMBIA

DOMINICAN REPUBLIC

ECUADOR

JAMAICA

MEXICO

SAINT VINCENT AND THE GRENADINES

UNITED STATES

Utah’s S.B. 162 will expand sales and use tax to additional digital audio/video access and subscription services starting July 1, 2026, reflecting a wider U.S. trend of updating taxes for digital and cloud offerings.

The U.S. Court of International Trade permanently blocked Trump’s Section 122 import surcharges, ruling the proclamation unlawfully relied on misread balance-of-payments deficit data.

The US will begin issuing electronic refunds of up to $166 billion for Trump-era tariffs starting May 12, following a Supreme Court ruling that found he exceeded his authority under the International Emergency Economic Powers Act, with businesses able to track claims via a new CBP system.

URUGUAY

 

ASIA-PACIFIC

AZERBAIJAN

BANGLADESH

INDIA

GSTN has launched an MS Excel-based offline Invoice Management System (IMS) tool in October 2024, along with a detailed user advisory, to help taxpayers efficiently manage invoices uploaded by suppliers.

INDONESIA

JAPAN

Japan is weighing a compromise to cut the food consumption tax to 1% for two years rather than zero-rate it, because updating retail point-of-sale systems for a 0% tax could take up to a year, while a 1% rate can be implemented in about three to six months, triggering political debate over the broken promise versus practical feasibility.

KAZAKHSTAN

MALAYSIA

NEW ZEALAND

PHILIPPINES

SINGAPORE

IRAS is requiring all GST-registered businesses in Singapore to transmit invoice data to IRAS via InvoiceNow-Ready Solutions on the Peppol-based InvoiceNow network, rolling this out in phases and encouraging early preparation through a free webinar on 14 May 2026 covering scope, timelines, and security.

SRI LANKA

TAIWAN

VIETNAM

The guidance explains when buyer identification (including TIN, name, and address) is or isn’t required on VAT invoices for state-collection activities, what to do when exported goods are returned after a VAT refund (including repayment and a supplementary declaration), and the rules for correcting input VAT invoices and reporting the corrections in the appropriate VAT period.

 

EUROPE

EUROPE

About one-third of UK small exporters may scale back or stop EU trading due to high compliance costs and complex, disruptive rules, prompting calls for urgent reforms to simplify customs, VAT, standards recognition, and related processes.

EUROPEAN UNION

The European Commission is reassessing whether many EU reduced VAT rates remain worthwhile as fiscal costs rise and their social benefits appear limited. It argues that lower VAT on essentials can help, but reduced rates for sectors like restaurants and accommodation are expensive and not strongly redistributive, suggesting more targeted measures or direct transfers instead.

EU Member States plan to step up the fight against VAT fraud by strengthening cooperation between EPPO and OLAF and giving them greater access to cross-border VAT data to enable faster prosecutions, pending European Parliament approval expected in July.

On 18 May 2026 the EU Council’s Working Party on VAT will hold an exploratory exchange of views on proposals to reform distance sales rules, including abolishing the €150 threshold and further aligning VAT treatment of customs-warehouse goods with ongoing e-commerce VAT reforms.

EUROPEAN COURT OF JUSTICE

ALBANIA

AUSTRIA

BELGIUM

BULGARIA

Effective 1 January 2026, Bulgaria amended its VAT law for goods supplied with installation/assembly by removing the EU supplier reverse-charge mechanism and potentially requiring EU traders to reconsider VAT registration and input VAT recovery in Bulgaria.

CROATIA

CYPRUS

CZECH REPUBLIC

From 1 July 2025, the Czech VAT rules for real estate change by shortening the mandatory VAT period for new buildings to 23 months (then generally exempting them), tightening conditions for opting to tax VAT, keeping building land taxable at 21% while other land remains exempt, and updating housing/social-housing definitions and reduced VAT eligibility using RÚIAN.

DENMARK

Denmark’s Tax Council ruled that two short (9- and 12-day) body-therapy continuing education courses were not VAT-exempt as vocational education because they were brief, non-qualifying continuing training with a primarily professional and commercial purpose offered for profit to experienced professionals and businesses, making them taxable.

FINLAND

FRANCE

France is unlikely to provide pre-filled VAT returns before 2030 even though a major B2B e-invoicing and e-reporting mandate begins in September 2026 for large enterprises.

GERMANY

The case held that, for hotel advertising services supplied through a foreign main office with only a small German liaison office, the place of supply and eligibility for input VAT deduction must be assessed based on the actual fixed establishment involved, and the claimed German input VAT was rejected.

GREECE

Greece has delayed Phase B of its e-transport mandate for the second time, setting new requirements—control data activation from 12 October 2026 and TARIC-aligned commodity coding from 1 January 2027—while allowing voluntary early reporting and leaving Phase A unchanged.

ICELAND

IRELAND

Ireland’s Revenue has updated VAT guidance for guest/holiday accommodation and outlined upcoming July 1, 2026, VAT rate reductions for restaurant and catering services.

ITALY

KOSOVO

LATVIA

Latvia’s fiscalization system requires compliant cash registers and proper receipt/reporting, and violations such as using unauthorized devices, failing to issue receipts, deleting fiscal data, or missing required reports trigger fines from €70 up to €20,000 for businesses and service providers.

LITHUANIA

MALTA

NETHERLANDS

The court held that mediation activities by X BV in healthcare property purchases are VAT-taxable services (not profit distributions), upheld the reduction of the VAT penalty, and ruled that the inspector did not prove gross negligence regarding the model-home VAT deduction.

NORWAY

POLAND

VAT shown on invoices issued outside the KSeF system can be deducted when the buyer actually receives the invoice (e.g., paper or PDF), as long as the standard VAT deduction conditions are met. The deduction right arises only when both the seller’s tax obligation has arisen and the invoice has been received; the invoice’s form does not affect this. General VAT deduction rules still apply even after KSeF becomes mandatory.

PORTUGAL

Portugal has granted a grace period for submitting April 2026 invoice reporting, extending the deadline into May 2026 due to early-May public holidays.

ROMANIA

RUSSIA

SERBIA

SLOVAKIA

The Financial Administration has launched an interactive e-invoicing guide to help businesses determine applicability and prepare, offering instructions, FAQs, webinars, and support as e-invoicing becomes mandatory for most entities in January 2027 under the EU’s ViDA VAT modernization package.

SPAIN

SWEDEN

SWITZERLAND

TURKEY

The document outlines Turkey’s e-commerce and fiscalization requirements for online sales, detailing the specific obligations businesses must meet for online transactions.

UKRAINE

UNITED KINGDOM

 

MIDDLE EAST

OMAN

QATAR

Qatar’s Cabinet has approved a draft law governing e-invoicing and its executive regulations, supported by the Ministry of Finance and the GTA to establish a formal framework for transparent, digitized, and well-regulated invoicing.

SAUDI ARABIA

UNITED ARAB EMIRATES

The UAE’s phased mandatory e-invoicing rollout requires all businesses to choose one of 28 approved service providers by July 1, 2026, in preparation for the system starting Jan 1, 2027 (with smaller firms later in 2027).

 

 

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