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The Isle of Man will lower the VAT on children’s meals in restaurants and on family tickets to cinemas, theatres, shows and attractions from 20% to 5% between 25 June and 1 September. The change is part of a broader cost‑of‑living relief package that also includes a fuel duty freeze until 31 December and a reduction in red diesel duty from 15 June.
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.
In today's VAT update, we highlight key developments across Europe, Africa, and APAC, including the VAT implications of transfer pricing adjustments and recent changes to VAT relief and refund systems in Ukraine and Egypt. Additionally, notable court rulings and regulatory updates in countries such as India and Belgium are also discussed. These changes aim to improve tax efficiency and clarify existing rules, with significant implications for businesses operating globally.
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The Isle of Man will lower VAT on children’s meals and family entertainment tickets from 20% to 5% between 25 June and 1 September 2026, easing costs for families. The change also applies to cinema, theatre, show tickets and attraction admissions. Additionally, red diesel duty will be cut from 10.18p to 6.48p per litre from 15 June 2026.
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.
China has expanded its instant VAT refund scheme for foreign tourists, allowing refunds at the point of sale and simplifying customs checks. From 1 July 2026, customs will conduct random inspections for claims below CNY 10,000, while tourists must validate claims within 28 days of purchase. The reforms aim to boost inbound tourism and consumer spending.
The UK will apply a temporary 5% VAT rate to children's meals, admission tickets to theatres, cinemas, concerts, exhibitions, shows, and family attractions from 25 June 2026 to 1 September 2026 inclusive. The reduced rate ends on 1 September 2026, after which the standard rate resumes.
Greece has rolled out its first phase of mandatory B2B e‑invoicing, targeting large companies from March 2026 and all companies by October 2026, with full penalty enforcement from May 2026. The e‑transportation regime, part of the myDATA platform, now requires real‑time tracking of goods, with Phase A becoming fully mandatory in December 2025 and Phase B fully mandatory from October 2026. The new rules also introduce item‑level classification using the Unified Commodity Coding System from January 2027.
From 1 January 2026, Italy has enacted a new automated VAT assessment regime for omitted annual returns, allowing the tax authority to calculate VAT due using e‑invoicing and other digital data. The automated determination must be completed by 31 December of the seventh year following the missing return, and penalties are capped at 120% of VAT due, reducible to one‑third if paid within 60 days of notice.
