Global VAT & Indirect Tax News

Portugal has extended its mandatory B2G e‑invoicing regime to all business sizes, with key deadlines moving into 2026 and 2027. The new rules require QR codes, ATCUD codes, and eventually Qualified Electronic Signatures (QES) for electronic invoices, while the eSPAP platform remains the official submission channel. SAP ECC and S/4HANA users must adopt the eDocument Cockpit and integration flows to remain compliant.

The European Data Protection Supervisor has warned that the European Commission’s proposal to grant the European Public Prosecutor’s Office and OLAF direct access to VAT information at EU level needs clearer safeguards to prevent blurring administrative and criminal boundaries. The proposal, aimed at tackling VAT fraud costing the EU €12.5‑32.8 bn annually, would amend an EU regulation to centralise access to VAT data for law‑enforcement purposes.

Spain’s December 2025 draft law transposes the first wave of the EU ViDA directive, tightening OSS rules, clarifying the €10,000 distance‑sales threshold, and expanding non‑Union OSS scope. It also introduces a representative requirement for non‑EU businesses seeking VAT refunds and sets transitional measures for call‑off stock and energy supplies. The draft signals that the most significant e‑invoicing and digital‑reporting mandates will arrive in 2030 and 2035.

Belgium will require VAT‑liable businesses to issue and receive structured electronic invoices (PEPPOL) from 1 January 2026. For the first three months of 2026, no sanctions will be imposed if companies can prove timely and reasonable preparations, but the tolerance is case‑by‑case and not a blanket postponement.

UK consumers buying from EU retailers may face extra customs duties, import VAT and courier handling fees on orders over £135, while orders £135 or less are exempt from additional charges. The new rules require EU sellers to register with HMRC and consumers can refuse extra fees but must pay to receive goods. Reclaiming overcharged duties and VAT is possible through specific customs forms, though courier fees are generally non‑reimbursable.

The CJEU ruled that a lawyer providing free legal assistance who receives a fee from the opposing party upon a successful outcome is considered a VAT taxable person. The court held that the lawyer's fee constitutes a supply of services for consideration, subject to VAT under the EU VAT Directive. This decision clarifies that such fees are taxable even when paid by a third party.

Fabian Barth examines how HMRC’s positions on input tax deduction have varied across cases, citing Royal Opera House, Hotel La Tour, and Littlewoods. He highlights contradictory stances on LVCR trade in the Channel Islands, underscoring the complexity of VAT compliance. The post emphasizes that court rulings and precedent shape the practical application of VAT rules.

Croatia’s new Fiscalization Act will require all VAT‑registered businesses to issue electronic invoices for domestic B2B transactions from 1 January 2026, using EN 16931‑1:2017 standards and real‑time transmission to the tax authority. Paper invoices will only be allowed in exceptional cases, and non‑VAT‑registered businesses must accept and issue e‑invoices by 1 January 2027. Penalties apply for non‑compliance.

On 15 January 2026 France and Germany will roll out updated hybrid e‑invoicing standards—Factur‑X 1.0.8 in France and ZUGFeRD 2.4 in Germany—aligned with the EU EN 16931 framework and the French AFNOR XP Z12‑012 standard. The update adds support for complex invoice structures, a newer UN/CEFACT CII release, clearer rounding tolerance rules, and updated documentation. Businesses invoicing in either country should verify ERP compatibility and adjust tax logic to meet the new tolerances.

The EU has updated its eInvoicing standard EN 16931, adding B2B extensions, new technical specifications, and a semantic data model. The ViDA initiative now requires near real‑time VAT reporting for intra‑EU transactions, with a new Digital Reporting Requirements (DRR) message that is a VAT report, not an invoice. Businesses aligning early will avoid compliance issues and benefit from streamlined invoicing and reporting.

The Madras High Court has ruled that input tax credit (ITC) claimed by dealers is provisional until they provide proof of the underlying sale transaction. The court directed the dealer to submit the required documentation, emphasizing that ITC cannot be confirmed without supporting evidence. This decision underscores the importance of maintaining proper records for GST compliance.

The Philippine Bureau of Internal Revenue’s RMC 108-2025, issued on 8 January 2026, expands the list of VAT‑exempt drugs under the TRAIN and CREATE Acts. The new list now covers 675 cancer drugs, 542 hypertension drugs, 323 diabetes drugs, 300 mental‑illness drugs, 173 high‑cholesterol drugs, 154 kidney‑disease drugs and 75 tuberculosis drugs, significantly broadening patient access to essential medicines.

Maastricht Centre for Taxation has released two free, open‑access books – "VAT in a Day" and "Customs in a Day" – that provide concise introductions to the EU VAT Directive and the Union Customs Code. The publications aim to equip readers with a solid grasp of EU indirect tax law within a single day and are supported by leading Dutch universities and tax firms.

From 1 January 2026, a wave of jurisdictions will tighten enforcement of VAT and GST on cross‑border digital services, expanding scope, tightening registration triggers and integrating data‑driven compliance. The changes focus on stronger enforcement, refined liability rules and closer integration of transaction and payment data, affecting non‑resident digital service providers worldwide.

The EU has granted importers of ammonia and urea a temporary exemption from import duties and CO2 tax, effective 1 January 2026, to keep fertilizers affordable for farmers amid the Mercosur trade negotiations.

Kentucky Rep. Beverly Chester-Burton has filed House Bill 175 to establish a yearly sales tax holiday for school‑related purchases. The holiday would run from 12:01 a.m. on the first Friday of August until midnight Sunday, exempting most clothing items up to $200 and other specific items under $3,000. If enacted, the state sales tax would be eliminated on those items during the holiday period.

This article explains how Thailand’s VAT rules treat trade and cash discounts, highlighting that only trade discounts granted at the time of sale and without conditions can be excluded from the VAT base. It cites the Revenue Department ruling No. Kor.Kor.0702/6077 (14 Oct 2025) that requires VAT to be calculated on the full selling price for conditional discounts, and notes that no VAT credit note can be issued when a deposit is refunded.

Morrisons has lost a VAT court case, resulting in a £17 million tax bill. The ruling confirms the supermarket’s liability for unpaid VAT and underscores the importance of strict compliance for retailers. The decision may serve as a precedent for future VAT disputes in the UK.

Italy has reduced the VAT rate on works of art, collectibles and antiques to 5% from 1 July 2025, replacing the former 10% rate for imports and sales by authors. The change applies to domestic sales, imports and intra‑Community acquisitions, but is incompatible with the margin scheme for resellers. Operators must adjust invoicing, ledger practices and potentially switch between margin methods to comply with the new regime.

Zimbabwe has increased the standard VAT rate on tourism services from 15% to 15.5% and re‑classified activities and transfers from zero‑rated to standard‑rated, effective 1 January 2026. The move puts pressure on operators with long‑lead bookings, prompting calls for a transitional period and raising compliance costs. The change is expected to reduce Zimbabwe’s competitiveness in the Southern African tourism market.