Global VAT & Indirect Tax News

The UK First‑Tier Tax Tribunal clarified that caregivers supplied to nursing and residential care homes are not VAT‑exempt unless they are registered medical professionals or supervised as required. The tribunal found that the taxpayer's services did not meet the exemption criteria and no other exemptions applied. The decision was issued on 16 December 2025.

Bulgaria has amended its VAT Act to require foreign EU suppliers to register for Bulgarian VAT and charge local VAT on supply and install contracts, effective 1 January 2026. The change replaces the previous reverse‑charge mechanism, aligning with the EU place‑of‑supply rule. Bulgarian customers will receive VAT‑charged invoices, and suppliers must update contracts and invoicing systems accordingly.

On 17 December 2025 the UK First‑Tier Tax Tribunal ruled that companies trading in telephone calling cards are liable for VAT and penalties, rejecting their claim to recover input VAT on purchases from a Hong Kong supplier. The tribunal held that the companies acted as principals, not agents, and failed to hold valid VAT invoices.

Cyprus Tax Agency extended the filing and payment deadline for certain VAT obligations to Jan. 20, 2026. The extension covers VAT returns for the period ended Nov. 30, 2025, VIES summary tables for December 2025, and flat‑rate declarations for the special urban taxi regime. Late filing may incur a 10% additional VAT and a €100 penalty.

The BFH ruling confirms that input tax can be deducted for the renovation of a historic castle even when financed by public grants and private donations, provided there is an entrepreneurial intent to generate taxable rental income. The decision clarifies that financing does not affect deduction, requires a clear allocation between private and taxable use, and mandates that the tax office determine the exact deductible share.

Italy’s 2026 Budget Law introduces several indirect tax measures effective 1 January 2026, including a new €2 levy on small shipments into the EU, a change to the VAT base for barter transactions, and automatic VAT settlement for non‑filing taxpayers. The law also postpones the plastic and sugar taxes to 1 January 2027 and the new consolidated VAT code will take effect on 1 January 2027.

France will terminate the one‑off fiscal representation route for Customs Procedure 42 on 1 January 2026, requiring non‑EU sellers to register for French VAT in their own name and file ongoing returns. The change removes the simplified “France‑as‑gateway” model and forces operators to adopt a formal French VAT footprint or reroute through other EU members.

Belgium’s federal government has raised the VAT rate on prepared meals from 6% to 12%, impacting school meals and home care for the elderly. The new rate applies to meals that must be eaten within two days, while frozen pizzas in supermarkets remain at 6%. The measure has sparked controversy and may increase costs for parents and the elderly.

Foreign investors in Indonesia must register for VAT once their annual turnover exceeds IDR 4.8 billion (US$300,000). After registration, all VAT invoices must be issued and validated through the e‑Faktur system, with monthly reporting and reconciliation required. Non‑compliant invoices and inconsistencies between invoices, returns, and accounting records can trigger audits and penalties.

The Post Office provides guidance for UK sellers on how the Import One Stop Shop (IOSS) scheme applies to sales into the EU. Items under €150 can be covered by IOSS, allowing buyers to pay duties and fees at purchase, while items over €150 or sold outside IOSS require duties to be paid by the recipient or via pre‑paid services. Gifts under €45 are exempt from duties and fees.

Burkina Faso has officially launched a certified electronic invoicing platform, replacing its 2017 normalised invoicing regime. The system will become mandatory for affected taxpayers from 1 July 2026 after a short transition period, enabling real‑time transmission of invoice data to the tax authority.

The article explains how Polish tax law requires recording purchases of commercial goods immediately upon receipt, and outlines procedures when goods are received before the invoice, including preparing a detailed description and attaching it to the invoice if received in the same month. It also notes the deadline for entries (20th of each month) and the conditions under which entries can be delayed until invoice receipt.

The Polish Ministry of Finance introduced a new regulation effective 1 January 2026 that changes how purchases are recorded in the tax books. If goods are delivered before the invoice is received, a detailed description must be prepared, but the entry is made on the invoice issue date, not the description date. Guidance is available in the Eureka system under reference numbers 670629 and 671795.

China’s Ministry of Finance and State Taxation Administration announced that from 1 April 2026, VAT export rebates for e‑cigarette products will be cancelled. The change also reduces battery product rebate rates and eventually cancels them, requiring exporters to adjust customs declarations accordingly.

China will eliminate VAT export rebates for photovoltaic products from April 1, 2026, and will reduce battery export rebates from 9% to 6% between April 1 and December 31, 2026, before fully phasing them out on January 1, 2027. The policy covers a wide range of solar and battery products, including monocrystalline silicon wafers, lithium‑ion batteries, and all‑vanadium redox flow batteries. This marks a significant shift in China’s export incentive regime, potentially increasing export costs for manufacturers.

North Macedonia has begun the pilot testing phase of its new e-invoice system, e‑Faktura, on 5 January 2026. The state‑owned platform will allow real‑time, direct communication between businesses and the tax authority, with test invoices having no legal effect. The rollout will include a client application by the end of Q1 2026, a production server by the end of Q2 2026, and mandatory adoption from Q3 2026.

KPMG Canada outlines new GST/HST and QST obligations for employers and pension plans. Employers offering registered pension plans must remit by January 31, 2026, while pension entities and master pension entities must file annual returns by June 30, 2026. The guidance also advises reviewing SLFI status and claiming eligible rebates.

Malaysia’s Inland Revenue Board (IRBM) has issued several updates to its e‑invoicing guidelines, expanding the use of consolidated invoices for construction materials, extending grace periods for small businesses, and tightening rules for electricity and telecom services. Full compliance is now required by 1 July 2026, with a phased roll‑out schedule and mandatory UBL 2.1 XML/JSON format, digital signatures, and a seven‑year archiving period.

Oman will introduce an e-invoicing mandate in 2026. The Oman Tax Authority (OTA) is hosting a second consultative workshop for service providers to discuss compliance and preparation for the upcoming requirement.

Under new UK legislation, businesses will no longer pay VAT on goods donated to charity, effective 1 April 2026. The change removes the current requirement for VAT on free gifts to charities, while donated resale goods remain zero‑rated. The relief aims to reduce waste and administrative costs for businesses and charities alike.