Sri Lanka has launched a national electronic invoicing framework to modernize its tax administration and curb tax evasion. The system, integrated with the existing Revenue Administration Management Information System (RAMIS) via a secure Web API, will roll out in stages, starting with a pilot phase expected to be fully deployed by the end of 2025 and eventually becoming mandatory for all VAT‑registered businesses and B2C POS transactions.

Cyprus has extended deadlines for VAT, VIES, and the Special Taxi Scheme to 20 January 2026, allowing submissions and payments without penalties. Businesses must be aware of the new penalties that will apply after this date. The extension covers VAT returns for the period ending 30 November 2025, VIES returns for December 2025, and the flat‑rate scheme for urban taxis from 1 July to 31 December 2025.

HM Revenue & Customs has reversed its stance on UK VAT grouping, stating that EU case law restrictions no longer apply. The change allows overseas establishments of VAT‑grouped businesses to be treated as part of the group even in EU states that do not use whole‑entity VAT grouping, and invites firms to reclaim overpaid VAT. The policy, announced after the 2025 Budget, seeks to simplify cross‑border compliance and attract foreign investment.

The newsletter covers recent VAT developments, including a new EU customs duty for low-value parcels, a UK Supreme Court ruling affecting VAT recovery on fundraising activities, and a change in VAT treatment for locum doctors following HMRC's decision not to appeal a tribunal ruling.