International - Indirect tax bytes

Bosnia and Hercegovina: New rules that apply as from 7 May 2025 include measures that distinguish between electronic services and electronically supplied services and increase the minimum amount of invoices eligible for a VAT refund to nonresidents from BAM 100 to BAM 200.
Dominican Republic: The tax authorities published a notice on 4 June 2025, confirming that the deadline for small, micro, and other non-classified taxpayers to implement e-invoicing is now 15 May 2026. The deadline for large and medium-sized taxpayers had already been extended for an additional six months to 15 November 2025 for taxpayers that are in the process of adopting e-invoicing.
Egypt: Amendments to the VAT law that were approved by parliament on 29 June 2025 eliminate the exemptions for crude oil and advertising and news agency services; these supplies are now subject to a 10% excise tax and 14% VAT, respectively.
Estonia: The standard VAT rate increased from 22% to 24% on 1 July 2025.
European Union:
- The General Affairs Council adopted amendments to the VAT directive on 18 July 2025 that introduce new rules shifting the VAT liability for imported distance sales from EU consumers to non-EU suppliers/platforms. The new rules, which will apply as from 2028, aim to encourage the use of the VAT import one-stop-shop, a tool that allows VAT registration in one EU state even when making sales throughout the EU.
- Advocate General (AG) Kokott of the CJEU issued an opinion on 10 July 2025 in joined cases involving the VAT exemption for cost-sharing groups. The AG said that services essential for tax-exempt activities, which typically would be carried out internally by larger entities, can fall under the VAT exemption for cost-sharing groups, as long as they do not result in a distortion of competition. The CJEU still must issue its decision in the cases.
- Denmark assumed the Presidency of the Council of the European Union on 1 July and will hold this position through 31 December 2025, taking over from Poland.
- On 27 June 2025, EU member states endorsed a compromise text on the reform of customs rules and procedures prepared by the Polish EU Council presidency. The compromise text makes changes to the initial version of the new Union Customs Code proposed by the European Commission on 27 May 2023 that would simplify and digitise customs processes. Among the changes are a new customs authority, a new customs data hub, new rules for distance sellers and platforms, and elimination of the EUR 150 low value exemption for imports.
- The European Parliament and the Council of the European Union reached an agreement on 18 June 2025 to simplify the Carbon Border Adjustment Mechanism (CBAM) to mitigate the administrative burden for small and medium-sized enterprises and occasional importers. Simplification measures include a de minimis threshold of 50 tonnes of imported goods per declarant per year, below which importers will be exempt from CBAM obligations; streamlined authorisation for CBAM declarants, reduced frequency of reporting, and simplified emission calculation and verification procedures. The agreement still must be formally adopted and published in the EU official journal.
Finland
- A public consultation is being held on a proposal to decrease the 14% reduced VAT rate to 13.5% starting in 2026. The consultation runs through 15 August 2025.
- The government has presented a new bill on excise duty on soft drinks that meets the requirements of EU state aid legislation following a decision by the European Commission on 23 May 2025 that the version of the law ratified by Finland’s president in 2023 is not aligned with the EU state aid rules. The Ministry of Finance has requested comments on the amended bill (for prior coverage, see the item in the Bytes column of the April 2025 issue of Indirect Tax News).
Ireland: The tax authorities clarified the rules for determining the VAT place of supply of events that are streamed or otherwise made virtually in an eBrief published on 26 June 2026 (for prior coverage, see the article in the November 2024 issue of Indirect Tax News). Under the new guidance, when determining the place of supply for admission to cultural, artistic, sporting, scientific, educational, entertainment events, etc., it is necessary to ascertain whether the event is a physical event, a virtual event or an electronically supplied service (ESS) and whether the person to whom the event is supplied is a VATable entity (B2B) or a nontaxable person (B2C): (i) the place of supply for admission to a physical event is the place where the event takes place, with the admission charge subject to VAT in Ireland; (ii) the place of supply for admission to a virtual event depends on whether the supply is a B2C or B2B transaction. There is no change to the rules in B2B transactions, i.e., the place of supply is the place where the recipient is established, but the place of supply in B2C transactions is the place where the recipient is established or resides; and (iii) if the event is an ESS, the ESS place of supply rules apply.
Isle of Man: As from 28 May 2025, interest rates for late payments and repayments related to VAT and other indirect taxes are reduced to 6.75% and 3.25%, respectively, according to an announcement by the Department of Treasury.
Italy:
- The “sugar tax” will become effective on 1 January 2026 rather than 1 July 2025. The tax on sugar-sweetened beverages, which will be levied at a rate of EUR 10 per hectoliter or EUR 25 per kilogram for products that require dilution before consumption, was originally scheduled to become effective on 1 July 2024 (for prior coverage, see the item in the Bytes column of the July 2024 issue of Indirect Tax News).
- A law decree published on 17 June 2025 and that applies from the following day makes the following changes to the VAT rules: (i) the scope of the reverse charge is extended to include transactions in the transport and logistics sectors; (ii) companies listed on the stock exchange and included in the Stock Exchange Milano Indice di Borsa index are no subject to the split payment mechanism, meaning they must comply with the ordinary VAT regime; and (iii) the deadline for making the final VAT payment for fiscal year 2024 and the first advance payment for 2025 is extended to from 30 June 2025 to 21 July.
Kenya: Finance Act 2025 has been enacted and applies as from 1 July 2025. The act includes a clarification of the significant economic presence (SEP) rules that became effective on 27 December 2024. The SEP rules replaced Kenya’s digital services tax, with tax applying at a rate of 30% on the taxable profits of nonresidents whose income from the provision of services is derived from, or accrued in, Kenya through a business carried on through a digital marketplace. Taxable profits are deemed to be 10% of the gross turnover from taxable services. The Finance Act clarifies that the SEP rules cover income earned through the internet or any electronic network. The Finance Act also repeals the 3% digital asset tax on the gross value of cryptocurrency transactions (originally proposed to drop the rate to 1.5%) and introduces an excise tax on fees charged on virtual asset transactions. Finally, the act expands the supplies that are subject to VAT and transactions subject to e-invoicing.
Laos: An instruction that applies as from 1 August 2024 introduces VAT compliance obligations on foreign suppliers of digital goods and services, digital platforms and e-commerce to users in Laos, effectively introducing a “deemed supplier rule.” If digital goods or services are supplied via a digital platform, the platform operator is deemed to be the supplier and is accountable for the calculation, collection and remittance of VAT to the tax authorities. The applicable VAT rate for nonresident suppliers of digital goods, digital platform services and e-commerce activities is 10% (increased from 7%). Taxpayers will use the DTax System for registering, filing and paying VAT.
Latvia: The government has further delayed the introduction of e-invoicing for B2B transactions to 1 January 2028 (previously 1 January 2027).
Lithuania: Two new reduced VAT rates of 5% and 12% will apply as from 2026. The VAT rate on books and publications will drop from 9% to 5% and all other goods/services that were subject to the 9% rate will be subject to the 12% rate.
Malaysia:
- In a press release dated 9 June 2025, the authorities announced that the expansion of the sales and services tax applies as from 1 July 2025. The changes—announced in the 2025 budget—include an expansion of the services tax to encompass rental or leasing services, construction services, finance services, private healthcare, education and beauty services and a 5% or 10% rate on discretionary and non-essential goods and (for an analysis of the expansion, see the tax alert prepared by BDO in Malaysia).
- As from 1 July 2025, the construction and financial services sectors are subject to Malaysia’s sales and services tax at rates of 8% and 6%, respectively (with exemptions for capital markets, foreign exchange and residential construction).
- The Inland Revenue Board (IRB) has updated the timeline for the implementation of e-invoicing that gives taxpayers with annual turnover or revenue of up to MYR 5 million additional time to implement e-invoicing. The IRB also issued updated e-invoicing guidelines.
Maldives: The GST rate for tourism goods and services increased from 16% to 17% on 1 July 2025.
Mauritius: The National Budget 2025-26 presented by the prime minister on 5 June 2025 includes several indirect tax proposals, such as requiring businesses to register for VAT if their turnover from taxable supplies exceeds MUR 3 million (currently MUR 6 million), bringing certain digital services provided by nonresidents within the VAT net and extending the e-invoicing system to suppliers whose annual turnover exceeds MUR 80 million (for an analysis of the budget proposals, see the tax alert prepared by BDO in Mauritius).
Nigeria: The tax authorities announced on 9 July 2025 that large taxpayers supplying taxable goods and services will be required to comply with mandatory e-invoicing requirements starting on 1 August 2025. Large taxpayers for these purposes are businesses with turnover of NGN 5 billion or more. The tax authorities launched a new e-invoicing platform, the Merchant Buyer Solution (eInvoice), in conjunction with the inauguration of the National Electronic Invoicing Inter-Agency Steering Committee, which will oversee the platform rollout.
Pakistan: Finance Act 2025, enacted on 27 June 2025, includes the introduction of a 5% Digital Presence Proceeds Tax (DPPT), a tax similar to a digital services tax. Under the Digital Presence Proceeds Tax Act 2025, foreign vendors with a significant digital presence in Pakistan will be subject to the DPPT on proceeds from supplies of digitally ordered services or goods from outside Pakistan, regardless of whether the supply is made digitally or physically. A foreign vendor will be deemed to have a significant digital presence in Pakistan if it supplies digitally ordered services and goods from outside Pakistan to a user in Pakistan and the aggregate amount of the supplies exceeds PKR 1 million in a fiscal year and one of several other conditions is satisfied. The 5% tax will be collected by the payment intermediary, such as a bank, financial institution, etc.
Philippines: The deadline for nonresident digital service providers to register for VAT purposes was extended to 1 July 2025 from 1 June 2025 (for prior coverage, see the article in the January 2025 issue of Indirect Tax News). The tax authorities issued a new VAT return form for nonresident digital service providers on 30 May 2025.
Poland: A law published on 7 July 2025 increases the VAT exemption threshold from PLN 200,000 to PLN 240,000 in sales in the previous or current year starting on 1 January 2026.
Romania:
- The new coalition government intends to increase the standard VAT rate from 19% to 21% and consolidate the reduced rates of 5% and 9% into a single 11% VAT rate.
- An ordinance published on 30 June 2025 delays mandatory e-invoicing for foreign cultural institutions operating in Romania based on intergovernmental agreements and Romanian farmers applying the special VAT scheme for farmers. E-invoicing for these groups was scheduled to apply as from 1 July but has been extended to 1 October 2025.

Rwanda: Starting on 1 October 2025, a digital services tax of 1.5% will be levied on companies providing digital services and that have a substantial presence in Rwanda.
Saudi Arabia: Guidance published in April 2025 clarifies the VAT implementing regulations in areas such as VAT groups, VAT representatives and VAT compliance and the definition of “services.”
Singapore: The Inland Revenue Authority of Singapore has updated its guidance on GST registration requirements and the overseas vendor registration regime (the fourth and fifth editions of the latter). Registration is required if taxable turnover is more than SGD 1 million at the end of the calendar year or is forecast to exceed that amount in the next 12 months. The updates to the overseas vendor rules address imported low-value goods and the related GST registration and reporting rules, as well as the registration regime for imported remote services.
South Africa: The Minister of Finance announced on 24 April 2025 that the planned increase in the standard VAT rate from 15% to 15.5% will not be implemented as from 1 May 2025. The rate increase included in the 2025 National Budget would have been implemented in two phases: to 15.5% with effect from 1 May 2025, followed by a further increase to 16% on 1 April 2026 (for prior coverage, see the item in the Bytes column in the April 2025 issue of Indirect Tax News).
St. Lucia: The government announced on 8 July 2025 that the 6% service charge tax on essential goods will be waived during the period 1 June 2025 to 31 May 2026 to ease the cost of living.
Taiwan: The VAT registration threshold for nonresident providers of electronic services increased from TWD 480,000 to TWD 600,000 on 7 April 2025.
Tanzania: Finance Act 2025, published on 30 June 2025 and effective as from 1 July 2025, contains several indirect tax changes such as adding reinsurance premiums as a VAT-exempt supply; expanding VATable supplies to include online intermediation or platform-based services, such as accommodation booking, online marketplaces and payment services platforms offered by nonresident to unregistered persons in Tanzania; introducing a new reduced VAT rate of 16% to B2C purchases made via online payments through a bank or approved electronic payment system from 1 September 2025; and a new VAT withholding mechanism.
Thailand: Registration fees for certain property transfers and mortgages have been reduced temporarily to ease the financial burden on Thai citizens and encourage real estate sales. In particular, the transfer registration fee on the sale of condominiums, residential and commercial buildings and land dropped from 2% to 0.01% where both the sale price and the appraised price of the property does not exceed THB 7 million; and where the mortgage amount does not exceed THB 7 million on such transfers, the registration fee dropped from 1% to 0.01%. The reduced rates apply from 22 April 2025 through 30 June 2026.
Tunisia: Guidance issued by the government provides details on new e-invoicing rules. E-invoicing is mandatory for large companies conducting transactions with public institutions and local authorities and B2B transactions involving pharmaceutical products and fuel (but not retail distribution). Penalties will apply for noncompliance.
Turkey: A climate law enacted on 9 July 2025 includes an emissions trading scheme, carbon pricing framework and border carbon adjustment mechanism. The government recently announced an increase of 15.71% in the fixed amounts of special consumption tax on petroleum products as from 3 July 2025.
Uruguay: The reduced VAT rate of 9% that applies to certain tourism activities where payment is made with a credit or debit card or e-money payment is extended through 30 April 2026 to support the tourism sector. The 9% rate was due to expire on 30 April 2025.