VAT & Indirect Tax Intelligence
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Slovakia is advancing its mandatory e‑invoicing rollout, with the new system set to take effect on 1 January 2027. A draft amendment to the VAT Act introduces transitional relief, exempting domestic buyers from digital reporting of received invoices until 1 July 2030. The government also opened voluntary participation to entrepreneurs and is developing a certified digital postman framework.
Today's VAT news is dominated by significant developments in Europe, including a key court ruling on fixed establishments and updates on mandatory online registration for tax advisors. Additionally, various countries are introducing VAT reforms, such as temporary reduced rates for certain goods and services, and broader tax system overhauls. These changes are also being examined in the context of the latest research findings, including the Billentis 2026 Key Report.
Today's VAT news highlights key developments in European e-invoicing regulations, including Slovakia's adaptation of its system and France's delay of its e-reporting mandate. Additionally, a recent ruling on Stellantis sheds light on the interplay between VAT and transfer pricing, while other regions see changes aimed at stimulating demand in specific sectors, such as pharmaceuticals in APAC. These updates are complemented by revisions to existing guidelines, including the updated VAT Notice 742A on opting to tax land and buildings in Europe.
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The article provides a detailed checklist for UK VAT‑registered businesses to comply with the Making Tax Digital (MTD) programme, outlining digital record‑keeping, API submission, exemption criteria, and the penalty regime. It also highlights upcoming MTD requirements for Income Tax and offers guidance on software selection and consolidation.
HMRC has introduced a mandatory online registration portal for tax advisers who interact with HMRC on behalf of clients. The portal becomes operational from 18 May 2026 and must be fully functional by 31 March 2027. Advisers have three months from the opening of the registration window to apply for an Agent Services Account (ASA).
HM Revenue & Customs has introduced a temporary reduced VAT rate of 5% for qualifying children's meals, tickets and family attractions. The rate applies from 25 June 2026 until 1 September 2026. After that, the standard rate will resume.
Guernsey's Policy and Resources Committee proposes a 3% GST, a new vehicle tax, and changes to income and corporate tax rates to close a £50m funding gap. The GST would take effect in 2028, with vehicle taxes ranging £25-£280 annually and a 10% corporate tax rate extended. Income tax for earnings £15,800-£28,000 would be set at 15% and social security contributions would not apply to earnings below £11,222.
The 2026 Billentis report outlines a rapid shift toward mandatory e‑invoicing worldwide, driven by new mandates such as the EU’s ViDA package and Africa’s 2026 roll‑outs. It highlights the adoption of Peppol’s five‑corner model for real‑time reporting in France and the UAE, and stresses the need for structured data and integration across tax, procurement, and payment systems.
HMRC has removed VAT on eligible goods donated by VAT‑registered businesses to registered charities, effective 8 June 2026. The relief includes a monetary cap per item and prohibits charities from reclaiming VAT on donated goods. Businesses should keep detailed records of donated items.
The UK government’s Great British Summer Savings initiative introduces a temporary VAT reduction from 20% to 5% on certain children’s meals and family-focused activities from 25 June to 1 September 2026. Businesses must identify qualifying supplies, review pricing, adjust bundled offers, and update booking and accounting systems to manage mixed VAT treatments and potential advance‑booking adjustments.
The May 2026 Tax & Reg Watchpoint highlights a wave of VAT reforms across Brazil, Africa, Europe, and Asia, including Brazil’s dual VAT model, new digital services taxes in Rwanda, Malawi, Botswana, and Togo, EU data‑sharing for fraud, and other cross‑border compliance changes.
The UAE Ministry of Finance released version 1.1 of its Electronic Invoicing Guidelines on 1 June 2026, clarifying data storage responsibilities, advance payment invoicing, and sample invoice calculations to support the country’s digital tax infrastructure.
Latvia will introduce a temporary 12% VAT rate on essential food products from 1 July 2026, while the standard rate remains 21% and a 5% super‑reduced rate applies to specific categories. Businesses must update invoicing, ERP, and VAT return processes before the effective date to avoid compliance issues.
EU introduces a €3 flat customs duty per HS6 item on IOSS shipments under €150, removes de minimis exemption, and targets a €2‑€3 per package handling fee, affecting cross‑border merchants from July 1, 2026.
Azerbaijan introduces mandatory VAT registration for non‑resident digital service providers exceeding a USD 10,000 B2C threshold, effective 1 September 2026, with a new online portal and a shift from automatic withholding to provider responsibility.
HMRC has confirmed that VAT‑registered companies in Dorset can donate goods to registered charities without incurring VAT, provided the goods are used to support people in need or deliver charitable services. This removes a barrier that previously required businesses to pay VAT on donated goods. Businesses should keep accurate records of donated items, especially high‑value goods.
