Global VAT & Indirect Tax News

The Upper Tribunal ruled that Lycamobile UK must pay more than £50 million in VAT, requiring the operator to charge VAT on the full price of prepaid mobile bundles at the point of sale, rather than only on services actually used. The decision, dated 12 Feb 2026, overturns Lycamobile's previous VAT calculation method.

Bangladesh’s National Board of Revenue has revised the VAT structure on liquefied petroleum gas (LPG), removing the 7.5 % VAT at local production and trading stages and the 2 % advance tax at import. A uniform 7.5 % VAT will now be applied at the import stage, effective 16 February 2026 and set to remain until 30 June 2026. The change is expected to lower the overall VAT burden on consumers by roughly 20 %.

Nigeria’s 2025 Tax Act removes VAT on land, completed buildings, and both residential and commercial rent, effective January 2026. The reform allows contractors to recover input VAT on construction materials and gives tenants rent relief up to ₦500,000, capped at 20 % of annual rent. Mortgage interest for owner‑occupied homes remains tax‑deductible.

The February 2026 Global VAT Guide provides a concise overview of recent VAT and e‑invoicing developments across Europe, the EU, Japan and Mexico. Key updates include Belgium’s new place‑of‑supply rules for virtual events, Croatia’s extended VAT return deadline, the Czech Republic’s InstatEvo transition, a temporary €3 customs duty on low‑value goods in the EU, and changes to Belgium’s federal tax payment BIC code.

The article discusses the EU’s longstanding VAT exemption for financial services, noting that the exemption was introduced in 1977 and remains in place across EU member states, Iceland, and the UK. It reviews the European Parliament’s February 2026 draft report, which calls for modernising the tax framework, highlights the 91 sector‑specific taxes that have emerged, and explores options such as abolishing the exemption for B2B services or differentiating between B2B and B2C. The piece underscores the hidden costs, market distortions, and competitiveness concerns that the current exemption creates.

China's Ministry of Finance announced a phased rollback of VAT export rebates for battery products, cutting the rebate from 9% to 6% from April 2026 to December 2026 and eliminating it entirely from January 2027. Photovoltaic product rebates will also be scrapped from April 2026. The move is expected to squeeze margins for exporters unless they can pass costs to overseas buyers, with industry experts forecasting gradual price increases of 2–3% for power batteries and 2–4% for energy storage batteries.

China has lowered the import VAT on 16 agricultural products, including refined sunflower and rapeseed oils, from 13% to 9% effective 2 February 2026. A new tariff line 1512190010 was created for refined sunflower oil, and the change applies to a range of oils and fats. Products imported from the USA remain subject to retaliatory MFN tariffs.

Nigeria’s Tax Act 2025 has fully exempted land, buildings and rent from Value Added Tax, aiming to lower housing costs and stimulate real‑estate investment. The law also reduces construction withholding tax to 2 % and allows mortgage interest on owner‑occupied homes to be deducted. Additional reliefs include rent relief up to ₦500,000 and various tax incentives for small businesses and real‑estate investors.