Global VAT & Indirect Tax News

A leading global SaaS provider discovered that 10% of its customer tax IDs were missing or invalid, exposing over $9 million in potential annual VAT shortfalls. The article highlights gaps in the EU VIES system, varying validation frequency requirements across jurisdictions, and the operational benefits of automated tax ID validation.

Poland is set to roll back its Mandatory Disclosure Rules and simplify VAT compliance from 1 October 2026, while tightening enforcement through new limitation rules and faster overpayment recovery. The third‑party liability threshold will rise to PLN 5,000 and authorities may remit tax before the due date or determine property tax liabilities from existing data. These changes aim to reduce administrative burden and enhance enforcement against VAT abuse.

Reform UK has proposed cutting the VAT rate on hospitality from 20% to 10% as part of a rescue package for pubs and restaurants. The article argues that the move would undermine VAT neutrality, add administrative complexity, and likely fail to lower consumer prices. It also notes that Germany announced a similar 7% hospitality VAT cut in January 2026.

The French 2026 Finance Bill introduces a €2 customs charge on low‑value imports (≤€150) from non‑EU countries, effective 2026, targeting e‑commerce parcels. The measure is expected to raise about €400 million annually and is part of broader EU customs reforms, including a €3 interim levy from 1 July 2026 and a planned €2 levy across the EU by 2028.

This Thomson Reuters blog outlines the growing complexities of indirect tax compliance, from global VAT and GST rules to real‑time reporting demands, and explains how AI, cloud platforms and integrated solutions can automate filings, improve accuracy and reduce audit risk.

Poland has submitted a draft digital services tax to the legislative programme. The proposal would levy a 3% compensatory tax on digital services in Poland, applying to entities with global revenue over EUR 1 billion and Polish taxable revenue over PLN 25 million. Public consultations are set to start 2 Feb 2026, with no implementation date yet announced.

ATAF presented African viewpoints on VAT treatment of crypto assets and internationally traded services at the OECD Global Forum on VAT in Paris. The presentations highlighted practical, implementable approaches, clear VAT models for token exchange, and the development of a regional toolkit for non‑resident suppliers. The event underscored the importance of regional coordination and stakeholder engagement to align African realities with global VAT policy.

Croatia's Official Gazette published Ordinance No. 90, amending the VAT Ordinance. The ordinance introduces new reporting requirements for food donations, updates vehicle registration procedures to require proof of VAT payment, simplifies VAT documentation for nonresidents, clarifies invoice issuance rules, extends filing deadlines, and amends information reporting for specified goods.

The French Administrative Court of Appeal of Paris issued Decision No. 24PA02339 on Jan. 30, 2026, clarifying a company's liability for corporate income tax, social contributions, VAT, and payroll tax, and its eligibility for research tax credits. The court found the audit was not irregular and that a director’s driving course expense was not professional, granting only partial relief.

The Bahraini National Bureau for Revenue released updated guidance on VAT treatment of real‑estate lease incentives on 29 January 2026. The guide clarifies that rent reductions and rent‑free periods are exempt, while reimbursements for fit‑out contributions are taxable. It also provides examples of common lease incentives used by landlords.

The article discusses the impact of the Philippines’ 12% VAT on households and the economy, and examines Senate Bill 1152’s proposal to reduce the rate to 10%. It highlights the fiscal implications, including a projected revenue loss of about P330 billion from 2026 to 2030, and the broader effects on consumer spending and government finances.

The Bahrain Tax Agency released an updated VAT general guide in English on Jan. 28, 2026. The guide clarifies that outsourced services are taxable, VAT is due on full consideration when third‑party providers assign roles under direct supervision, and employee salaries remain outside VAT. These updates aim to provide clearer guidance for businesses operating in Bahrain.

South African Revenue Services (SARS) is preparing to launch a mandatory e‑invoicing model, with full operational capability targeted for 2028. The initiative builds on the 2025 Draft Tax Administration Laws Amendment Bill and will include e‑invoicing, e‑reporting and a Peppol‑based interoperability framework. A phased rollout is planned for 2026‑2027, with stakeholder engagement and framework publication before the 2028 launch.

This guidance explains that German businesses can apply to extend the deadline for filing VAT returns by one month. If the extension is used, a special advance payment equal to one‑eleventh of the previous year’s advance payments must be paid, and it is credited in the December advance payment calculation. The special payment can be corrected upon application if expected VAT changes due to a rate change.

HMRC released guidance on 28 January 2026 for developers of tax software that use generative AI. The guidance sets five mandatory principles—transparency, reliable source data, human oversight, security/GDPR compliance, and ethical AI with continuous auditing—to ensure AI outputs are trustworthy and legally grounded. Compliance requires clear disclosure, audit trails, limited data sources, and ongoing monitoring of models.

A UK Upper Tribunal decision allows a bespoke hair‑replacement system for severe female hair loss to be zero‑rated under Schedule 8 of the VAT Act 1994. The ruling expands the definition of disability to include social and psychological impacts and confirms that composite supplies that adapt goods can qualify for relief. The case clarifies that wigs and similar products are not automatically treated the same, opening new zero‑rating opportunities for adaptive products.

Colombia’s Constitutional Court suspended the emergency decree that imposed a 19% VAT on online gambling, leaving operators subject only to the standard 15% GGR tax. The suspension, effective from 29 January 2026, will remain until the court’s plenary chamber issues a final decision. The 19% VAT, originally introduced in February 2025 on deposits, expired on 31 December 2025 before being shifted to GGR.

China’s Ministry of Finance and State Taxation Administration has reclassified certain telecom services, raising the VAT rate from 6% to 9% on mobile data, SMS, MMS, and broadband access. The change takes effect from the beginning of 2026, prompting operators to consider price adjustments or bundle redesigns to mitigate revenue impacts.

Latvia has increased its Intrastat reporting thresholds for 2024, raising the Arrivals threshold to €380,000 and the Dispatches threshold to €220,000. These new thresholds will take effect on 1 January 2026, aligning Latvia with updated EU Intrastat reporting requirements.