Global VAT & Indirect Tax News

Irish Revenue has clarified the implementation schedule and scope for the B2B e‑invoicing and real‑time reporting regime under the ViDA reforms. The phased rollout begins in November 2028 for large corporates, expands to all VAT‑registered businesses in intra‑EU trade by November 2029, and covers all cross‑border B2B transactions from July 2030. Large corporates must issue structured e‑invoices and report key data, while all VAT‑registered businesses must be technically capable of receiving structured e‑invoices.

The Knesset rejected Finance Minister Bezalel Smotrich’s order to double the VAT exemption ceiling on personal imports to $150, voting 59 against and 25 in favor. The order was intended to lower the cost of living and reduce online purchase prices, but critics warned it would harm local businesses.

UAE's Ministry of Finance has announced a phased e-invoicing mandate, starting with a voluntary pilot in July 2026 and full compliance by 2027. Businesses with turnover above AED 50 million must go live by January 2027, while those below that threshold must comply by July 2027, with B2G e-invoicing required from October 2027. The February 2026 eInvoicing Guide outlines scope, penalties, and technical specifications for the new system.

On 11 February 2026, the EU General Court ruled that Polish VAT deduction rules are inconsistent with EU law, allowing businesses to deduct VAT in the month the transaction occurred if the invoice is received before the filing deadline. The decision invalidates the practice of postponing deductions to the next settlement period and is binding on Polish tax authorities, potentially improving liquidity for taxpayers. The ruling may prompt amendments to national regulations.

The Israeli Knesset voted on 24 February 2026 to revoke a ministerial order that would have raised the VAT exemption threshold for online purchases from $75 to $150. The order, which had been in effect since December 24, was defeated 25–59 after Prime Minister Netanyahu allowed a free vote for coalition lawmakers. The revocation removes the exemption for imported packages valued up to $150, restoring the previous $75 threshold.

Ireland’s Revenue has clarified that large corporates managed by its Large Corporates Division will be required to adopt e‑invoicing from 1 November 2028, while financial services firms will not be in scope for Phase One but must still receive e‑invoices from that date, with full implementation starting in November 2029. The move aligns with the EU’s VAT in the Digital Age initiative and will be followed by real‑time VAT reporting.

Croatia has announced it will extend the reduced 5% VAT rate on certain energy products until March 31, 2027, to help curb inflation. The measure covers natural gas, district heating, and various wood fuels, and the extension is expected to forgo about €47 million in revenue. Without the extension, the rate would revert to 13% at the end of March 2026.

The Dutch Supreme Court (Hoge Raad) on 20 Feb 2026 reversed a lower court’s ruling and confirmed that a market‑maker can use its gross trading result to calculate the VAT deduction of mixed costs, following the analogy to foreign‑exchange transactions. The court also clarified that the fiscal group may use reasonable estimates to determine the EU/non‑EU customer ratio and can include TNMM fees and RPSM payments in the allocation key, while referring the case back for further investigation into the nature of RPSM payments.

Canada’s federal government has announced a one‑time top‑up to the GST credit, rebranded as the Canada Groceries and Essentials Benefit, which will increase payments by 25 % for five years starting in July 2026. The benefit will extend to 500,000 new families, potentially helping up to 12.6 million Canadians, but eligibility thresholds are low, excluding many low‑income households. The article argues that these tweaks are insufficient and calls for a larger increase in the basic personal amount to provide broader relief.

A preliminary ruling before the CJEU (Case T‑96/26, TellusTax Advisory) examines whether a Swedish supplier’s right to deduct input VAT can be limited because the services were provided to a Luxembourg securitisation vehicle that benefits from a fund‑management VAT exemption. The Swedish Tax Authorities denied the deduction, arguing that VAT must have been due in Luxembourg for the deduction to apply. The outcome will have implications for securitisation vehicles and the broader fund industry.

Austria will exempt menstrual hygiene products and certain contraceptives from VAT from 1 January 2026, replacing a 10 % reduced rate. The Austrian Federal Competition Authority (BWB) is empowered to ensure the tax savings are passed on to consumers and can launch sector investigations if prices do not reflect the relief. This marks a novel use of competition law to safeguard the effectiveness of a gender‑focused social policy.

The European Parliament’s Committee on Economic and Monetary Affairs released a draft report on 4 February 2026 urging the European Commission to overhaul the outdated 1977 VAT exemption for financial services. The report proposes taxing identifiable charges such as fees and commissions, introduces coordinated temporary windfall taxes on exceptional bank profits, and calls for an alternative to the withdrawn EU-wide Financial Transaction Tax.

The Peppol network will enforce a mandatory switch from G2 to G3 digital certificates on 1 April 2026. Failure to migrate will revoke the G2 trust chain and disconnect Access Points from the network. OpenPeppol has issued detailed guidelines to help providers become dual‑capable during the transition.

Poland's KSeF e-invoicing system requires all VAT‑registered businesses to submit B2B invoices via a centralized platform using the FA(3) XML format. Large taxpayers must comply from February 2026, others from April 2026, with a grace period through 2026 and penalties starting in 2027. The system assigns unique identifiers, stores invoices for ten years, and imposes up to 100 % VAT penalties for non‑compliance after the grace period.

The blog explains how embedding tax automation into marketplace platforms can unlock revenue, reduce risk, and support compliance across multiple jurisdictions. It outlines platform reporting obligations in the EU (DAC7), UK, Mexico, Canada, Australia, and other countries, and highlights the benefits of integrated tax services for sellers and platform operators.

Ethiopian judges on 21 February 2026 rejected a bid by lawyers to freeze a controversial VAT directive, leaving the directive in effect. The decision centers on whether VAT compliance can be compelled without a threshold, a question that has implications for legal professionals and businesses. The ruling clarifies that the current VAT registration requirements remain unchanged.

The EU will eliminate the €150 customs and VAT threshold for low‑value consignments from March 2028, making e‑commerce platforms the de‑emed importers responsible for all duties and VAT. A single EU Customs Authority and a Customs Data Hub will be established to centralise and simplify customs procedures, with the new regime expected to raise €1 billion in revenue annually.

South Africa’s National Treasury is unlikely to raise the VAT rate for Budget 2026/27, citing political resistance. Instead, the focus will shift to enforcement and administrative reforms to strengthen the VAT system. A R20 bn tax increase pencilled in for 2026/27 is also expected to be reconsidered based on Sars performance.

Federal Decree‑Law No. 16 of 2025 introduced a five‑year limitation period for VAT refund claims in the UAE, effective 1 January 2026. Businesses must now file returns strategically to avoid permanent loss of input‑VAT credits, with transitional relief until 31 December 2026 for credits older than five years. The change turns VAT compliance into a cash‑flow optimisation tool.

The article examines the Tour Operators’ Margin Scheme (TOMS), highlighting its intended simplification for travel agents and the significant challenges it poses, such as blocked input VAT and inconsistent application across EU Member States. It discusses the scheme’s impact on profitability, competitive distortions, and the European Commission’s public consultation on reforms launched in 2025.