VAT & Indirect Tax Intelligence
VAT news digest
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The Russian State Duma approved a bill that temporarily freezes the VAT exemption threshold for small businesses on the simplified tax system at 20 million rubles through 2029. The threshold will then fall to 15 million rubles in 2029 and 10 million rubles in 2030, while businesses using the patent tax system remain unaffected.
Today's VAT news focuses on key developments in Europe, including updates on Portugal's VAT grouping regime, EU customs duty on low-value imports, and Poland's VAT warehouses. Additionally, the EU's e-commerce reform clearance operating model is under scrutiny. Meanwhile, in APAC, a notable court decision has been made regarding a VAT refund claim in Switzerland.
Today's VAT news highlights key developments in global tax compliance, including updates on e-invoicing systems in the UAE and France, as well as sales tax filing and amnesty initiatives in the Americas. Additionally, we explore VAT registration thresholds in Europe, providing insight into the complex and evolving tax landscape. These articles offer essential guidance for businesses navigating international tax regulations and seeking to mitigate compliance risks.
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UK guidance on customs procedures for goods moved into the UK for international events. It covers Temporary Admission, ATA Carnet, and import duty reliefs, including application timelines, duration limits, and applicable Additional Procedure Codes (APCs).
EASProject explains that from 1 July 2026 EU orders up to €150 imported from outside the EU will incur a temporary €3 customs duty. Sellers must register for the Import One‑Stop Shop (IOSS) to collect VAT at checkout, handle the duty, and automate monthly reporting. The duty remains until 1 July 2028, after which a new customs reform will replace it.
The UK government is consulting on extending online marketplace VAT liability to domestic sellers, requiring marketplaces to collect and remit VAT on sales by UK-based sellers when goods are situated in the UK at the point of sale. The consultation runs from 23 June to 18 August 2026 and aims to reduce non‑compliance and level the playing field for VAT‑compliant sellers.
Crowe Poland outlines a draft amendment to the Polish VAT Act that proposes a mix of simplifications and tightening measures. Key proposals include a new VAT warehouse system, extended VAT payer list verification, elimination of certain reporting obligations, and changes to the TAX FREE system and goods classification. The draft also introduces tighter controls such as extended buyer liability and revised cash register rules.
Portugal’s new VAT grouping regime, effective from July 1 2026, introduces stricter eligibility criteria than other EU members, requiring a dominant entity to hold at least 75 % of share capital and 50 % of voting rights, and limiting participation to entities with a Portuguese head office that carry out deductible activities. The regime does not neutralise intra‑group supplies and may exclude financial and insurance groups with predominantly exempt activities.
EU Commission clarified how VAT should be applied to the new €3 customs duty on low-value imports. The duty, effective 1 July 2026, is exempt from VAT for IOSS users but taxable for Special Arrangements and standard imports. A separate €2 handling fee, expected before November 2026, will be outside VAT.
Poland has introduced a new VAT warehouse regime effective 2026, allowing non‑resident businesses to defer VAT on goods stored in authorised warehouses and maintain 0% VAT treatment while goods remain in the facility. The regime requires compliance with KSeF e‑invoicing, registration for Polish VAT, and strict documentation. KSeF e‑invoicing rollout completed for most businesses on 1 April 2026.
EU e‑commerce reform introduces a €3 per line‑item customs fee replacing the €150 exemption from 1 July 2026, and shifts import declaration responsibility from consumers to platforms or sellers from 1 November 2026. Declarants must provide three product identifiers (M‑PID, NS‑PID, S‑PID) and will act as deemed importers, while H7 and H1 declarations will determine duty and VAT regimes. The reform also clarifies carrier filing obligations and IOSS applicability.
The European Commission clarified that the new EUR 3 customs duty on low‑value consignments (≤ EUR 150) will apply from 1 July 2026. Under the IOSS scheme no VAT is due on this duty, whereas VAT is payable on it for imports using Special Arrangements or the standard import procedure. A Union handling fee, expected from November 2026, will be outside the scope of VAT.
The Court of Tax Appeals (CTA) En Banc denied FMC Switzerland II GMBH’s petition for review of a P10.5‑million VAT refund claim, upholding the earlier dismissal for lack of jurisdiction. The decision hinged on the BIR’s failure to act within the 90‑day period required by Section 112(C) of the National Internal Revenue Code, and FMC’s late filing of its petition beyond the November 26, 2021 appeal deadline.
The UK government has introduced a temporary VAT cut from 20% to 5% on a range of family-friendly activities, including cinema, theatre, attractions and children’s meals, running from 25 June 2026 until 1 September 2026. Businesses may choose to pass on the reduced rate, and the scheme also offers free local bus travel for children in England during August.
The Court of Appeal ruled that public funds paid to further education institutions are third‑party consideration for the supply of education, placing them within the scope of VAT but exempt. HMRC accepts the judgment, will not pursue a further appeal, and maintains the current position pending consultation, meaning institutions can continue their existing VAT treatment until any future policy change applies prospectively.
HMRC has replaced its default surcharge system with a points‑based penalty regime effective 1 January 2023. Late submissions accrue one penalty point each, with a £200 financial penalty triggered at filing‑frequency thresholds, while late payments incur percentage‑based penalties and interest at the Bank of England base rate plus 4%. Businesses must appeal within 30 days of a penalty notice and can reset points after a compliance period.
