VAT & Indirect Tax Intelligence
VAT news digest
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In the EU, the distinction between a branch and a subsidiary determines whether intercompany services are subject to VAT. The FCE Bank decision of 2006 establishes that services supplied by a head office to its branch are outside the scope of VAT, while the Skandia and Danske Bank rulings show that VAT group membership can change this outcome.
Today's VAT headlines focus on expanding e‑invoicing requirements across Europe and tightening correction rules,
Today's VAT headlines focus on the expanding scope of digital and e‑invoicing rules and the impact of new rates on emerging sectors. Maryland is introducing a sales‑
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Europe: SAP's Plants Abroad and RITA solutions let a single legal entity manage multiple VAT registrations across member states, simplifying reporting. The tools support tax code configuration, reporting by jurisdiction, and integration with ERP, but do not resolve tax determination or localisation requirements.
Germany requires domestic B2B businesses to issue structured electronic invoices, with phased implementation from 1 January 2025 to 1 January 2028. The mandate uses the European standard EN 16931 and the Peppol Network, and imposes strict technical guidelines from the Federal Ministry of Finance.
France: The Supreme Administrative Court ruled that audiobooks should be taxed at the reduced rate for books, not the standard rate for audio devices. Tax authorities have opened a public consultation on revised guidance, with comments due 30 September 2026.
France has finalised e-invoicing rules, setting mandatory e-invoicing from 1 September 2026 and e-reporting from 1 September 2027. The decree updates platform architecture, format standards and audit procedures. Businesses must prepare by selecting accredited platforms and ensuring compliance with new data transmission requirements.
EU Amazon sellers must register for VAT in each country where they store stock, as Amazon's Pan-EU FBA triggers local VAT obligations. The article explains how Amazon validates registrations against VIES from 1 January 2026 and outlines the compliance costs of local registration versus using EFN. It also details new requirements such as Italy's financial guarantee and Poland's automatic deregistration after inactivity.
Luxembourg will broaden mandatory e-invoicing beyond public procurement, introducing a structured B2B mandate. The draft law sets phased obligations from 1 January 2028 for large firms, 1 July 2028 for medium-sized, and 1 January 2029 for all other businesses. Cross-border B2B e-invoicing will apply from 1 July 2030.
France: From September 2026, the e-invoicing mandate will prevent the reuse of invoice numbers after submission, requiring cancellation and new issuance for errors. Businesses must therefore validate data within their ERP before sending to avoid rejected invoices and costly rework.
India: The GST Appellate Tribunal ruled that GST authorities cannot challenge undisputed pre-GST credits under Section 74 of the CGST Act. The decision confirms that transitional credits from CENVAT, Krishi Kalyan Cess and VAT cannot be denied without specific findings, and Section 74 penalties are unsustainable.
Luxembourg requires businesses to issue and receive e-invoices for domestic B2B transactions from 1 January 2028, with phased implementation for smaller firms. The draft bill aligns with the EU ViDA Directive and mandates compliance with EN 16931 and a single network, likely PEPPOL.
EU VAT reforms under ViDA will overhaul e-commerce VAT rules, introducing e-invoicing, expanded deemed supplier rules and a single VAT registration.
Greece will enforce mandatory e-invoicing from 12 October 2026, requiring all businesses to issue digital documents exclusively. Businesses must notify AADE by 30 September 2026.
Japan's consumption tax will be cut for the first time, with the rate on food items (excluding restaurant meals) falling from 8% to 1% from 1 April 2027 for two years. Prime Minister Sanae Takaichi announced the measure to support households amid rising living costs. The change marks a historic first reduction in Japan's consumption tax since its introduction in 1989.
France requires all VAT-taxable businesses to use an approved platform for B2B e-invoicing from 1 September 2026, with larger firms also issuing invoices from that date. Peppol is a network standard that approved platforms may use, but Peppol certification alone does not grant French approval.
Here are this week's top VAT and indirect tax updates.
