VAT & Indirect Tax Intelligence
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Bulgaria's National Assembly has submitted a draft bill proposing a 0% VAT rate on essential food and beverage items in the country's small consumer basket. The proposal, submitted on 18 May 2026, would apply to staples such as bread, milk, dairy, basic meats and poultry. If approved, businesses would need to adjust VAT logic, invoicing and reporting systems to reflect the zero‑rated treatment.
In today's VAT news, European countries are implementing changes to value-added tax regulations, including a VAT cut on children's meals aimed at reducing costs for families. Meanwhile, Germany is introducing stricter VAT group rules to enhance compliance and prevent abuse. Additionally, Spain has released a technical update for its B2B Crea y Crece e-invoice e-reporting system, further streamlining electronic invoicing processes.
Today's VAT news highlights significant developments in European and international taxation, including the implementation of automated VAT assessments and e-invoicing systems in several countries. Italy and Sweden are leading the charge in Europe with new measures to enhance tax compliance, while the Dominican Republic has introduced mandatory e-invoicing in the Americas. Additionally, proposed taxes on e-commerce parcels in Austria and VAT increases in Ukraine in exchange for EU loans demonstrate the ongoing evolution of VAT policies worldwide.
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The Supreme Court has upheld a 28% GST on online gaming, applying it retrospectively to curb unregulated wagering. The ruling targets real‑money games and aims to aid investigations into money laundering. The decision marks a significant shift in India's approach to digital gambling.
Germany's Federal Ministry of Finance has issued a new guidance letter effective 1 April 2026 that narrows the scope of intra‑group VAT exemptions for Organschaft. The update expands situations where intra‑group transactions may trigger VAT, particularly for supplies linked to non‑economic activities, and allows taxpayers to use the old approach until 31 December 2026. Businesses must reassess charging models, input VAT recovery and ERP logic for German VAT groups.
Spain's tax authority AEAT has outlined technical details for the upcoming Crea y Crece B2B e‑invoicing rollout, including a hybrid 5‑corner architecture and multi‑layer validation requirements. The order will enter force in October 2026, with the public platform live in August 2027 and mandatory e‑invoicing for high‑turnover firms from October 2027, expanding to all businesses by October 2028. Payment status reporting will extend to smaller entities in October 2029.
Ireland is set to introduce a comprehensive e‑invoicing mandate in phases, with B2B reception mandatory from November 2028 and full ViDA compliance by July 2030. The mandate will rely on the Peppol network, using Peppol BIS 3.0 for B2B and Peppol BIS/PINT‑EU 4.0 for cross‑border e‑reporting. Revenue will issue detailed guidance ahead of each phase.
The Supreme Court of Korea ruled that fresh flower decorations supplied at hotel wedding venues are a provision of services, not a supply of goods, and therefore subject to VAT. The ruling overturned a lower court decision that had treated the decorations as exempt unprocessed agricultural products. As a result, the tax office assessed significant VAT amounts for Josun Hotel & Resort for 2018.
The UK Chancellor announced temporary VAT cuts from 20% to 5% on family attractions during school holidays, effective from the end of June to 1 September 2026. Additional measures include free bus journeys for under‑16s in England in August, a 12‑month HGV road tax holiday, and a one‑third reduction in red diesel duty until the end of 2026. Business leaders argue the cuts are insufficient to support hospitality and other sectors.
The UK government has introduced a temporary 5% VAT rate on admission to certain family attractions, effective from 25 June to 1 September 2026, replacing the standard 20% rate. The cut covers museums, planetariums, heritage sites, nature reserves, botanical gardens, children’s meals and performance‑venue tickets marketed for children, but excludes seasonal passes beyond 1 September unless priced similarly to day tickets. Charities already exempt from VAT do not benefit unless they operate through a VAT‑registered trading subsidiary.
Kazakhstan has launched a pre‑filled VAT return system that automatically populates Form 300.00 using data from its Electronic Invoice Information System, taxpayer accounts and customs declarations. The system updates VAT return data on a T+1 basis, requiring VAT credit notifications to have a ‘confirmed’ status. Businesses must ensure accurate and timely submission of invoices and credit adjustments to avoid errors in the pre‑filled returns.
The Court of Cassation’s Order no. 17536/2025 clarifies that formal violations of VAT bookkeeping and invoice preservation do not automatically bar the right to deduction, provided substantive obligations are met. The ruling sets two exceptions—fraudulent intent or inability to prove substantive compliance—under which deduction is denied. It reinforces the principle of fiscal neutrality while maintaining sanctions for formal non‑compliance.
Austria’s parliament approved legislation halving the VAT on essential food items to 4.9% from 10% effective 1 July 2022. The measure covers staples such as milk, bread, eggs, rice, flour and selected fruits and vegetables, and is expected to save households about €100 a year.
Austria has approved legislation to halve the VAT on essential food items, reducing the rate from 10% to 4.9% effective 1 July 2026. The measure covers staples such as milk, bread, eggs, rice, flour, and certain fruits and vegetables. The government estimates the cost at €400 million and household savings of about €100 per year.
UK announced a temporary emergency VAT reduction from 20% to 5% on children’s meals and family attraction tickets for the 2026 summer holidays. The relief applies from 25 June to 1 September 2026 and covers specific categories such as dedicated children’s meals, family admission tickets, and attractions like theme parks and museums. Businesses may adjust VAT retrospectively and refund excess charges.
Latvia will lower the VAT rate on a range of essential food items from 21% to 12% effective 1 July 2026, following an agreement between the Ministry of Economics and retailers. The change covers bread, milk, poultry products, eggs and flour, and is designed to be fully reflected in consumer prices. The move is part of a broader low‑price basket initiative aimed at easing food costs for residents.
