Global VAT & Indirect Tax News

The European Court of Justice ruled that Croatian VAT authorities cannot deny intra‑Community supply exemptions solely because a trader has not supplied the specific evidence required under Article 45a of Implementing Regulation No 282/2011. The court requires a full assessment of all evidence to determine whether goods were dispatched or transported between Member States. Businesses can still claim the exemption if alternative evidence demonstrates transport between Croatia and Slovenia.

China’s new Value‑Added Tax Law and its Implementing Regulations entered force on 1 January 2026, bringing significant changes to taxable transaction definitions, VAT rates, and taxpayer status thresholds. The law retains the 13 %, 9 %, and 6 % rates, introduces a 3 % levying rate for the simplified tax method, and adjusts the real‑estate VAT rate for individuals to 3 %. Enterprises exceeding RMB 5 million in annual taxable sales must switch to the general taxation method, and the definition of taxable services and intangible assets now focuses on consumption within China or domestic sellers.

The UK Supreme Court ruled on 15 January 2026 that VAT on professional costs incurred in connection with a VAT‑exempt share disposal is not recoverable, rejecting any general fundraising exception. The decision applies to corporate groups where the parent provides taxable management services to a subsidiary, confirming that share sales remain within the scope of VAT but exempt, and that VAT grouping does not alter this treatment. Taxpayers must therefore plan for non‑recoverable transaction costs when restructuring or disposing of subsidiaries.

The Austrian government will cut the VAT rate on a basket of essential food items from 10% to 5% starting 1 July 2026, a move aimed at easing inflationary pressures. The measure was confirmed on 14 January 2026 and will be counter‑financed by fees on imported parcels from third‑country suppliers such as China.

Advocate General Kokott’s Opinion C‑603/24 clarifies how intra‑group transfer price adjustments interact with VAT. The opinion states that such adjustments are not automatically a separate VAT supply, but may alter the taxable amount under Articles 73 and 90 of the VAT Directive if they reflect a variable purchase price agreed upfront. Only when an actual service for consideration exists is a separate supply considered.

The Czech Tax Agency clarified input VAT deduction rules for acquisitions of long‑term assets effective 1 January 2025. The guidance outlines procedures for partial deductions, incorporates the EU cross‑border regime for small enterprises, and sets a deadline for claiming deductions by the end of the second calendar year after the relevant year.

This guidance handbook from HMRC explains customs authorisations in detail, covering their purpose, eligibility, application procedures, compliance requirements, guarantee types, authorisation management, appeals, renewal, and the legal framework. It serves as a technical reference for businesses and customs officials to correctly apply for and manage customs authorisations.

The EU Official Gazette published a preliminary ruling from the ECJ on Jan. 12, 2026, concerning Croatian VAT rules for intra‑community supplies of goods. The case involved a Croatian trading company supplying oak logs to Slovenia and claiming a VAT exemption, which was challenged for lack of documentation under Article 45a of Regulation 282/2011. The ECJ held that Directive 2006/112/EC and Regulation 282/2011 must be interpreted accordingly.