Global VAT & Indirect Tax News

The EU has proposed a law allowing governments to temporarily reduce VAT rates to counteract price rises, particularly in fuel, and protect citizens’ standard of living. The proposal is aimed at mitigating inflationary pressures in Montenegro and has broad political support. It follows examples such as Spain’s reduction of fuel VAT from 21% to 10%.

Russia is proposing to exempt crypto exchanges and custodial services from VAT, with the bill expected to be adopted by July 1 2026. The exemption covers digital rights confirming exclusively monetary claims but does not apply to profits, which will still be taxed under standard rules. Ordinary users will face a purchase limit of $3,700 per year and can only buy the largest coins listed by the Central Bank.

Russia is drafting a law that will exempt cryptocurrency exchange and custody services from VAT, while subjecting their profits to standard corporate tax. The bill also introduces new personal tax rules for crypto traders, limits retail purchases to $3,700 per year, and requires Russian residents to report foreign‑based crypto wallets to the Federal Tax Service.

The EU Parliament has reopened debate on the optional reverse charge mechanism, which is set to expire on 31 December 2026. While the tool has proven effective in curbing missing trader intra‑community fraud in high‑risk sectors, concerns remain about VAT distortions and the need for complementary digital reporting controls. The review signals that reverse charge will stay part of the anti‑fraud toolkit but will be increasingly paired with real‑time transaction monitoring under the ViDA framework.

The article analyzes the CJEU ruling in Titanium Ltd v. Finanzamt Österreich (C-931/19) and its implications for fixed establishment and reverse charge in cross‑border B2B services. It clarifies that a fixed establishment requires permanent human and technical resources, and that the reverse charge applies when such an establishment exists. It also notes that Article 47 lex specialis applies to services linked to immovable property, making VAT payable in the Member State where the property is located regardless of a fixed establishment.

Russia will exempt cryptocurrency exchange and custody services from value‑added tax, covering ancillary services related to issuance and trading of digital currencies. The bill, expected to be adopted by July 1 2026, also sets corporate tax rules for platform profits and allows traders to offset acquisition costs against income, though losses cannot be carried forward.

Slovakia is drafting legislation to extend its domestic reverse charge regime to high‑risk B2B services such as IT, advertising and consultancy. The new rules would shift VAT liability to the customer and would only take effect once Slovakia secures a derogation from Article 193 of the EU VAT Directive. Businesses should prepare for customer‑side VAT accounting, stricter VAT ID checks and ERP updates.

The article examines the CJEU ruling on whether a subsidiary automatically constitutes a fixed establishment for VAT purposes. It explains that a subsidiary must satisfy substantive conditions under Article 11 of Implementing Regulation No 282/2011, and that a third‑country parent operating through a subsidiary in Poland does not automatically create a fixed establishment. The ruling also clarifies that EU‑Korea FTA restrictions on corporate forms do not affect the fixed establishment concept.

The post outlines Portugal’s VAT framework, highlighting the 23% domestic rate, the 0% international regime for services to non‑EU clients, and the reverse‑charge rule within the EU. It also discusses exempt sectors under Article 9, the 6% reduced rate for affordable housing, and the digitised 2026 recovery process for VAT credits.

India’s GST, launched in 2017, was intended to unify indirect taxes and balance fiscal power between the Union and States. However, successive rate cuts, the expiration of the compensation guarantee in 2022, and the 2025 three‑tier reform have eroded state revenue, deepening fiscal dependence on the Union.

EU Parliament has tabled more than 200 amendments to its draft report on a coherent tax framework for the financial sector, with VAT reform at the centre. The proposals aim to narrow the long‑standing VAT exemption for financial services, tax fee‑based B2B services, consolidate the Insurance Premium Tax into VAT, and modernise rules for neobanks, crypto and other digital financial services. A parliamentary vote is scheduled for 26 April 2026, with a vote expected in May and potential plenary adoption in June.

Sri Lanka has postponed the introduction of VAT on non‑resident digital services to 1 July 2026, from the originally planned 1 April. The amendment imposes an 18 % VAT on B2C digital and electronic services, aligning the country with over 120 other jurisdictions. Guidance on registration and compliance will be released in 2027, while local providers already pay 18 % VAT and B2B services are expected to be zero‑rated.

The Court of Appeal has ruled in favour of Colchester Institute in a VAT dispute with HMRC, allowing the college to reclaim VAT on pre‑2010 capital projects. The decision could extend to an estimated 20‑30 other colleges and raises uncertainty for charities that may lose VAT discounts. The ruling centres on the Lennartz mechanism, which HMRC had withdrawn in 2010.

AI sales tax blog post discusses how U.S. states are treating SaaS and AI chatbot services under existing sales tax frameworks. It highlights recent rulings in Kentucky, Indiana, Maine, and New York, noting that some states tax SaaS as a service while others exempt it. The article also explores potential future tax implications for AI‑powered physical products and advises businesses to monitor state developments closely.

Malta’s Value Added Tax Act will be amended by amendment 86 of 2026, taking effect on 1 October 2026, to narrow the VAT exemption for gambling and betting services. The changes are expected to improve VAT recovery for B2C operators and certain B2B providers, with detailed guidelines to follow.

Spain has approved a draft bill that will extend mandatory e‑invoicing from the B2G sector to B2B transactions. The new law requires companies to use certified invoicing software from 1 January 2024 and sets a phased implementation schedule based on turnover thresholds. Non‑compliance can lead to fines up to €10,000.

The European Commission will host a public workshop on 27 April 2026 to review the revision of Directive 2014/55/EU on e‑invoicing in public procurement. The event will outline potential policy measures, gather stakeholder feedback, and discuss the three policy options for the revision. The outcome will influence upcoming compliance requirements, including the ViDA reform that will mandate structured e‑invoicing for intra‑EU B2B transactions by July 2030.

The article examines how fully automated, AI‑run companies—termed zero‑person companies—challenge existing VAT rules. It explains that while such entities can perform all operational tasks, they still require a human link for legal accountability, and their place of establishment for VAT purposes is determined by where central administration effectively occurs, often defaulting to the registered office. The piece also discusses the low likelihood of fixed establishments arising solely from cloud infrastructure and outlines compliance implications for tax authorities.

Poland’s National e‑Invoicing System (KSeF) entered its second phase on April 1 2026, expanding the mandatory e‑invoicing requirement to almost all VAT‑registered businesses. The Ministry of Finance confirmed no sanctions for 2026 errors and reported over 87 million invoices processed in the first two months. The platform operates on Polish servers with proprietary encryption and a 24:1 capacity ratio.

The article explains that real‑time tax compliance involves continuous exchange and validation of transaction data with tax authorities, embedding tax processes into operational workflows. It identifies three main barriers—fragmented system landscapes, data that is not real‑time ready, and legacy operating models—and argues that local, country‑by‑country solutions will not scale. The author advocates for a unified data platform and a shift to viewing tax as part of digital infrastructure.