Global VAT & Indirect Tax News

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.

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.

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.

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.