The UK Government will temporarily reduce VAT on children’s meals and outings to 5% from 25 June 2026 to 1 September 2026, cutting the standard rate of 20%. The scheme covers children’s menu meals in restaurants, tickets for theatres, cinemas, soft play, adventure centres and theme parks. Businesses should review the GOV.UK guidance for eligibility and compliance.

The article explains how VAT on food supplements varies across EU member states, highlighting Germany’s split between solid (7%) and liquid (19%) rates and Sweden’s temporary 6% rate until 2027. It stresses the importance of correct Combined Nomenclature classification to apply the right rate and warns that misclassification can trigger back payments and fines.

An EU court has ruled that grouped companies, even when treated as a single entity for VAT payments, must be considered separately when determining eligibility for certain VAT exemptions. The decision clarifies that VAT group members cannot rely on a collective status to claim exemptions, affecting how VAT groups assess exemption eligibility across the EU.

Kenya’s Finance Bill 2026 proposes a VAT exemption for certain mobile phones, cutting the effective tax burden on imported devices from about 55% to 50%. The exemption would give imported phones a price advantage while local assemblers would lose the ability to recover VAT on inputs, raising their production costs and potentially making Kenyan‑assembled phones more expensive.

France has launched a 2026 e‑invoicing pilot that runs from February to August, allowing businesses to test real invoice exchanges on the French Public Invoicing Portal. The pilot precedes the mandatory e‑invoicing regime that will take effect on 1 September 2026. Storecove will enable clients to join the pilot from mid‑June via its French API and the national Annuaire directory.

The article outlines e‑invoice archiving requirements across the EU, highlighting minimum retention periods, technical format standards, and country‑specific rules. It details upcoming deadlines for Germany’s B2B e‑invoicing mandate and Poland’s KSeF platform, and explains how to maintain compliance with PDF/A, XML, and hybrid formats such as Factur‑X.

The UAE Federal Tax Authority has broadened the range of construction costs eligible for VAT refunds for citizens building new homes, effective 1 January 2026. The initiative covers items such as staff quarters, home gyms, smart home systems, swimming pools, and full reconstruction projects, and is expected to generate over AED 1 billion in approved refunds in 2026.

A London tribunal ruled that Barclays' British branch was skeletal and did not constitute a fixed establishment for VAT grouping purposes, resulting in the loss of Barclays' appeal. The decision clarifies the application of UK fixed establishment rules for foreign entities.

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.

Kenya's Revenue Authority reported a loss of Sh9.1 billion in fuel VAT revenue between April and May 2026 after the government cut the fuel VAT rate from 16 % to 8 %. The reduction was aimed at easing consumer pressure from rising fuel prices, significantly reducing KRA's revenue from a key tax stream.

Slovakia's Ministry of Finance has drafted a VAT reform package that transposes the EU's ViDA reforms and introduces changes to the 2027 e-invoicing regime. Key adjustments include removing the reporting requirement for domestic buyers during the transition period, exempting private landlords from receiving structured invoices, soft‑landing the first three months of 2027, and tightening the deadline for intra‑EU reverse‑charge invoices to the 15th day after the transaction month.

France confirms that its e‑invoicing mandate remains scheduled for 1 September 2026, with no postponement announced. The DGFiP will soften penalty enforcement until at least 1 January 2027 for taxpayers who made best efforts from the start of the first phase, and a contingency deferral to 1 December 2026 is still available. The launch will rely on the Plateforme Agréée network, of which only a fraction are currently active.

The UK Government has announced a temporary VAT cut for Northern Ireland hospitality, reducing the rate on tickets for theme parks, zoos and museums from 20% to 5% for the summer holidays of 2026. The move is part of a broader push to align Northern Ireland’s rates with the Republic of Ireland, where food and hospitality services will fall to 9% later this year. The decision is seen as a proof point for differentiated VAT policy to support the sector.

The International Monetary Fund has urged Pakistan to increase its standard General Sales Tax (GST) rate from 18% to 19% for the 2026-27 fiscal year, citing a tax shortfall. The IMF also proposes raising the GST on hybrid vehicles from 8.5% to 18% and introduces a fixed‑tax scheme for retailers with turnover up to Rs200 million. While the government has resisted the hike, the IMF estimates the 1% increase could raise Rs250‑300 billion in revenue.

Continuous Transaction Controls (CTCs) are shifting VAT review from post‑return to real‑time monitoring, driven by e‑invoicing and e‑reporting mandates across the EU. The EU requires intra‑community transactions to be e‑reported within 10 days, while Spain and Poland have tighter deadlines of 4 days and live e‑invoicing to KSeF, respectively. VATCalc offers a single tax engine that integrates VAT determination, e‑invoicing, e‑reporting and return preparation for 30+ countries.

Bulgaria's National Assembly has submitted a draft bill proposing a 0% VAT rate on essential food and beverage items in the country's small consumer basket. The proposal, submitted on 18 May 2026, would apply to staples such as bread, milk, dairy, basic meats and poultry. If approved, businesses would need to adjust VAT logic, invoicing and reporting systems to reflect the zero‑rated treatment.