On 14 January 2026 the Italian Revenue Agency issued Letter No. 4/2026 clarifying that an artistic foundry’s activity is a provision of services, not artwork sales. Consequently the 5 % reduced VAT rate does not apply because the foundry is not the author or rights holder of the artworks it produces. The foundry must therefore charge the standard VAT rate on its services.

This briefing examines how EU legislation shapes Member States’ ability to set VAT rates, highlighting the legal uncertainty and administrative complexity arising from multiple preferential rates. It calls for regular reviews to assess the necessity and effectiveness of these rates amid high budget deficits and competing spending priorities.

Slovakia will implement several VAT and tax changes from 1 January 2026, including removing the reduced 19% rate for processed foods high in salt or sugar, expanding the 5% reduced rate to certain printed media, exempting individuals from the financial transaction tax, and introducing a 0.0125% monthly special levy on pension and collective investment companies.

Austria will permanently cut the VAT on basic food items from 10% to 5% effective mid‑2026, a 50% reduction that the Austrian National Bank estimates will lower inflation by 0.5 percentage points one‑off. The move, welcomed by the Austrian Retail Association, is intended to provide lasting relief to consumers and is expected to be passed on by retailers where possible.

From 1 January 2026, Mauritius will impose VAT on digital and electronic services supplied by non-resident providers. Foreign suppliers must register for VAT regardless of turnover, and those exceeding MUR 3 million must appoint a tax representative. The new rules also eliminate the reverse charge for VAT‑registered foreign suppliers, requiring them to charge VAT on supplies to Mauritian businesses.

The article explains the conditions under which a B2B intra‑community supply of goods can be zero‑rated in the EU. It outlines the required documentation, reporting obligations, and the consequences of non‑compliance.

On 16 January 2026, the Nigeria Revenue Service clarified that VAT on banking services has always applied to fees, commissions and service charges, not to the money transferred. The NRS confirmed that the Nigeria Tax Act does not impose new tax obligations on bank customers and urged stakeholders to rely on official channels for accurate information.

Portugal’s government has proposed a 6% VAT rate on construction and rehabilitation works for primary residences, targeting urban development projects initiated between September 2025 and December 2029. The measure applies to sales under €648,022 and rentals under €2,300/month, with specific timing and lease conditions, and includes amended reverse‑charge rules and potential VAT refunds for individuals.

BDO’s 2026 update lists a range of VAT and excise duty changes across 22 jurisdictions, including new GST regimes, rate adjustments, and registration threshold shifts. Key highlights include Bhutan’s 5% GST from 1 January 2026, Denmark’s 0% VAT on books, and Ghana’s VAT rate cut to 20% with a higher registration threshold. The article serves as a quick reference for tax professionals monitoring upcoming indirect tax reforms worldwide.

Austria will reduce the VAT on certain food items from 10% to 5% mid‑2026, a measure financed by a new tax on non‑recyclable plastics. The specific foodstuffs eligible for the discount are yet to be defined, and the competition authority will enforce the reduction and ensure retailers pass the benefit to consumers.