Global VAT & Indirect Tax News

Belgium will not impose penalties for certain e‑invoicing offences from January to March 2026 if businesses show timely compliance efforts. The Hermes platform is being phased out, requiring a move to a Peppol‑certified system, and small VAT‑exempt firms must still issue e‑invoices.

Tunisia will require all service sector companies to submit electronic invoices via the El Fatoora platform from 1 January 2026, under Article 53 of the 2026 Finance Law. The mandate mandates TEIF XML format, qualified electronic signatures, and imposes penalties for non‑compliance. Service providers must act immediately to meet technical, procedural, and financial obligations.

Belgium has required all VAT‑registered companies to use electronic invoicing via the Peppol network since 1 January 2026. Accountants and bookkeepers, citing widespread technical problems, have asked the finance minister to postpone the 25 January VAT‑return deadline to 28 February and to waive penalties. The request highlights challenges with invoice delivery, software performance and duplicate filings.

On 14 January 2026 the Italian Revenue Agency issued Letter No. 4/2026 clarifying that an artistic foundry’s activity is a provision of services, not artwork sales. Consequently the 5 % reduced VAT rate does not apply because the foundry is not the author or rights holder of the artworks it produces. The foundry must therefore charge the standard VAT rate on its services.

This briefing examines how EU legislation shapes Member States’ ability to set VAT rates, highlighting the legal uncertainty and administrative complexity arising from multiple preferential rates. It calls for regular reviews to assess the necessity and effectiveness of these rates amid high budget deficits and competing spending priorities.

Slovakia will implement several VAT and tax changes from 1 January 2026, including removing the reduced 19% rate for processed foods high in salt or sugar, expanding the 5% reduced rate to certain printed media, exempting individuals from the financial transaction tax, and introducing a 0.0125% monthly special levy on pension and collective investment companies.

The Advocate General’s opinion in the Stellantis Portugal case (C‑603/24) clarifies that transfer pricing adjustments between group companies are to be treated as adjustments to the original prices of earlier sales, not as separate repair services. Consequently, corrective invoices must be issued and the VAT taxable base of those earlier supplies must be adjusted. The final CJEU judgment is expected later in 2026.

The European Commission’s ViDA initiative introduces a common EU digital reporting standard, mandatory e‑invoicing for intra‑EU B2B transactions, and expands the OSS/IOSS to cover more B2C supplies. It also imposes platform‑operator deemed‑supplier rules for accommodation and transport services. The phased rollout runs from 2025 to 2035, requiring businesses to modernise their tax technology and processes.

The Advocate‑General has clarified that transfer‑pricing (TP) adjustments made for direct tax purposes do not attract VAT, but TP adjustments that are contractually agreed within intra‑group supplies of goods are within the scope of VAT. In the Stellantis Portugal case (C‑603/24), the Portuguese tax authorities imposed VAT assessments on Stellantis Portugal for TP adjustments, and the Advocate‑General advised the European Court that such adjustments should be treated as price adjustments for vehicles. Businesses are urged to review their TP policies and implement VAT considerations in their ERP systems.

The ViDA package represents a sweeping overhaul of the EU VAT system, aiming to curb fraud, simplify SME compliance, and create a fairer digital marketplace. It introduces mandatory e‑invoicing and near real‑time digital reporting for intra‑EU transactions, expands the Single VAT Registration and Import One‑Stop Shop, and projects up to €18 billion in annual revenue gains and €5.1 billion in compliance cost reductions by 2030.

Sri Lanka has launched a national electronic invoicing framework to modernize its tax administration and curb tax evasion. The system, integrated with the existing Revenue Administration Management Information System (RAMIS) via a secure Web API, will roll out in stages, starting with a pilot phase expected to be fully deployed by the end of 2025 and eventually becoming mandatory for all VAT‑registered businesses and B2C POS transactions.

From 1 January 2026, Mauritius will impose VAT on digital and electronic services supplied by non-resident providers. Foreign suppliers must register for VAT regardless of turnover, and those exceeding MUR 3 million must appoint a tax representative. The new rules also eliminate the reverse charge for VAT‑registered foreign suppliers, requiring them to charge VAT on supplies to Mauritian businesses.

Cyprus has extended deadlines for VAT, VIES, and the Special Taxi Scheme to 20 January 2026, allowing submissions and payments without penalties. Businesses must be aware of the new penalties that will apply after this date. The extension covers VAT returns for the period ending 30 November 2025, VIES returns for December 2025, and the flat‑rate scheme for urban taxis from 1 July to 31 December 2025.

The article explains the conditions under which a B2B intra‑community supply of goods can be zero‑rated in the EU. It outlines the required documentation, reporting obligations, and the consequences of non‑compliance.

On 16 January 2026, the Nigeria Revenue Service clarified that VAT on banking services has always applied to fees, commissions and service charges, not to the money transferred. The NRS confirmed that the Nigeria Tax Act does not impose new tax obligations on bank customers and urged stakeholders to rely on official channels for accurate information.

HM Revenue & Customs has reversed its stance on UK VAT grouping, stating that EU case law restrictions no longer apply. The change allows overseas establishments of VAT‑grouped businesses to be treated as part of the group even in EU states that do not use whole‑entity VAT grouping, and invites firms to reclaim overpaid VAT. The policy, announced after the 2025 Budget, seeks to simplify cross‑border compliance and attract foreign investment.

Poland will require taxpayers to notify the e‑Tax Office before issuing invoices with attachments in KSeF 2.0 from 1 January 2026. The notification must include taxpayer details, activity type and technical parameters, and attachments must be part of the XML file. Additional legislative updates include simplified invoice rules, JPK_VAT amendments, and exemption provisions effective February 2026.

Mexico’s tax authority, SAT, has issued Rule 2.9.21 under RMF 2026, mandating digital platforms to provide real‑time, permanent online access to transaction records. The rule requires next‑day data availability, a five‑year searchable archive, and a formal request by April 30 2026, with detailed data obligations for both service providers and intermediary platforms.

The newsletter covers recent VAT developments, including a new EU customs duty for low-value parcels, a UK Supreme Court ruling affecting VAT recovery on fundraising activities, and a change in VAT treatment for locum doctors following HMRC's decision not to appeal a tribunal ruling.