Global VAT & Indirect Tax News

Ukraine requires electronic invoicing for taxpayers with annual revenue above UAH 1 million, and mandates SAF‑T reporting for SMEs since 1 Jan 2023 and for large enterprises since 1 Jan 2022. The Cabinet adopted a two‑year experimental e‑TTN project on 30 May 2024, which will become mandatory after the trial period, eliminating paper consignment notes.

China’s Ministry of Finance and State Taxation Administration announced a phased rollback of the 13% export VAT rebate for lithium‑ion batteries, cutting it to 6% on April 1 2026 and abolishing it by January 1 2027. The move has spurred a sharp rise in lithium prices and a front‑loading of exports, reshaping the global battery supply chain and leveling the playing field for non‑Chinese manufacturers.

The article discusses how adopting Article 59 bis of Directive 2006/112/EC would allow Spain to exclude from VAT the portion of charter fees earned in international waters, aligning its rules with France and Italy. Currently Spain applies a flat 21 % VAT to all charter fees regardless of itinerary. The author highlights the feasibility of implementing this measure using satellite geolocation for accurate itinerary certification.

This article discusses the importance of reviewing source documents for VAT compliance, highlighting common issues uncovered such as incorrect VAT treatment, missing invoice details, and data quality problems. It recommends a sampling approach of 10‑15 invoices per period and emphasizes the need to document findings and act on insights to improve processes.

The Supreme Court of India clarified that a 'part' of machinery must functionally participate in the machine’s operation, while structures that merely support do not qualify. It reaffirmed that tariff classification is a rule‑based exercise grounded in the Customs Tariff and HSN, and that end‑use is not determinative unless the tariff allows it. The ruling also confirmed that HSN explanatory notes carry binding interpretive value.

The Danish government is debating a VAT cut on food, with Prime Minister Mette Frederiksen favoring a general reduction rather than eliminating VAT on fruit and vegetables. The Moderates propose scrapping VAT on fruit and vegetables, while the Liberals have not set a specific cut amount. The government says a full cut cannot be implemented by this year's elections due to technical reasons.

The Deloitte TaxScape weekly VAT news update covers a First‑tier Tribunal ruling that allows Littlewoods to recover full input tax on photography costs, the withdrawal of HMRC’s linked‑goods concession under the ESC, and significant changes to the EU Deforestation Regulation effective 30 December 2026 for large and medium businesses. It also notes the removal of printed materials from the EUDR scope and the publication of these changes in the Official Journal on 23 December 2025.

The Isle of Man Gazette published the VAT (Repayment Interest) Order 2025, amending the VAT Act 1996. The order clarifies that no repayment interest will be charged on VAT refunds issued within 30 days from the later of the return filing, claim submission, or assessment notification. The order took effect on 6 November 2025.

The OECD released a report on 10 January 2026 outlining Digital Continuous Transactional Reporting (DCTR) for VAT, aiming to standardise e‑invoicing and e‑reporting across jurisdictions. The guidance covers planning, digital invoicing foundations, compliance support, data security, interoperability, and long‑term sustainability. It seeks to reduce compliance costs and fraud while promoting cross‑border consistency.

Baker Tilly outlines the key filing and payment deadlines for Dutch VAT returns in 2026, including special rules for months that fall on weekends, annual returns for small income‑tax entrepreneurs, and new requirements for supplementary returns and foreign VAT refunds. The article also highlights 2026 changes such as the abolition of the low lodging rate and new review periods for large real‑estate investments.

Turkey’s Presidential Decree No. 10813, published 7 January 2026, abolishes simplified customs declarations for B2C e‑commerce shipments, effective 6 February 2026. All shipments, even those valued at €30 or less, must now use regular customs procedures, with specific exceptions for medicines and food supplements under prescription. The decree also imposes fixed customs duties of 30% for EU and 60% for non‑EU shipments for certain products and adds a 20% Special Consumption Tax where applicable.

China’s Ministry of Finance and State Administration of Taxation announced that the VAT export tax rebate for photovoltaic (PV) and other products will be cancelled from April 2024. The rebate for battery products will be reduced from 9% to 6% from April 2024 until the end of 2026, after which it will be fully cancelled in 2025. The move aims to rationalise overseas prices, reduce trade friction and ease the national financial burden.

The EY Sales and Use Tax Quarterly Update provides a summary of the major legislative, administrative and judicial sales and use tax developments for the first quarter of 2026. It highlights recent changes involving nexus, tax base and exemptions, technology, and compliance and controversy.

The UK Government brief confirms that the VAT exemption for deputising services extends to all temporary medical staff, including locum doctors supplied by employment businesses, following a 2025 First Tier Tribunal ruling. Businesses that have charged standard‑rate VAT on such supplies within the last four years can claim a refund via an error‑correction notification. The brief also outlines the steps for claiming refunds and the impact on recovered input tax.

The China State Council adopted a new VAT Implementing Regulation on 19 December 2025, which came into force on 1 January 2026. The regulation, comprising 54 articles across six chapters, provides detailed enforcement procedures and clarifications on taxable goods, services, intangible assets, taxable persons, VAT rates, zero‑rated and exempt supplies, tax calculation, and cross‑border collection responsibilities, complementing the updated VAT law enacted in December 2024.

The EU has abolished the VAT de‑minimis rule, making VAT applicable to all commercial goods. Starting 1 July 2026, a €3 fixed duty per product type will apply to low‑value e‑commerce consignments, with a separate handling fee expected from late 2026 and the €150 duty‑free threshold slated to disappear by mid‑2028. Member states such as Romania have already introduced €5 logistics fees from 1 January 2026.

Croatia has made e-invoicing mandatory for B2B and B2C transactions for all VAT-registered businesses from 1 January 2026, with a second stage extending the requirement to non‑VAT entities on 1 January 2027. The mandate, known as “Fiscalization 2.0”, was implemented in two stages and follows the ordinance published on 17 December 2025. The Croatian Tax Authority has denied reports of system instability and will not grant a grace period.

The article outlines how corporate income tax (CIT) and VAT planning, vehicle selection, and structuring choices can materially affect returns on Portuguese real estate investments. It highlights Portugal’s progressive CIT rate reduction, the special tax regime for SICs, and the conditions under which VAT exemptions can be waived to enable VAT recovery while preserving CIT benefits.

The Polish Ministry of Finance clarified that invoices issued in PDF format cannot be corrected once the mandatory KSeF system becomes effective in February 2026. There will be no reversal or sanctions until 2027, and companies should use the transition period to establish internal processes.

The UK First‑Tier Tax Tribunal ruled on 16 December 2025 that photography costs used for product catalogues and an online store by an online retailer with integrated financial services are fully recoverable input VAT, as they are used for taxable retail supplies. The decision clarifies that such costs are not partially recoverable due to mixed use with exempt financial services.