Tax News Daily
The latest tax news from around the world, summarised and tagged for tax professionals. Updated twice daily.
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GST Input Tax Credit Challenges in India: Why ITC Remains the Biggest Compliance Issue
This article explores why Input Tax Credit (ITC) under India's GST regime remains the most significant compliance challenge for businesses. It covers common issues such as mismatches between supplier and recipient returns, blocked credits, documentation requirements, and the complexities introduced by evolving GST rules. The piece discusses the administrative burden on taxpayers to reconcile ITC claims, the risk of denial and penalties, and ongoing disputes with tax authorities, highlighting systemic issues that continue to create uncertainty for businesses operating under India's GST framework.
MDDP Webinar: B2B Reclassification into Employment: Dispute, Penalties and Tax Impact (VAT & Personal) (July 15)
MDDP is hosting a webinar on July 15 examining the tax consequences of reclassifying B2B contractor relationships as employment arrangements. The session will cover dispute resolution processes, potential penalties, and the dual tax impact spanning both VAT and personal income tax. This is particularly relevant for businesses and contractors in Poland facing increased scrutiny from tax authorities over the genuine nature of self-employment arrangements. Attendees will gain insight into audit risks, how to defend existing structures, and the financial exposure arising from reclassification decisions by tax authorities.
GST Return Default: Calcutta HC Orders Restoration of GSTIN to Protect Livelihood
The Calcutta High Court ordered the restoration of a taxpayer's GST Identification Number (GSTIN) after it was cancelled due to non-filing of GST returns. The court ruled that cancellation of GSTIN directly impacts the taxpayer's ability to conduct business and earn a livelihood, warranting judicial intervention. The judgment emphasizes that tax authorities must balance compliance enforcement with the constitutional right to carry on trade. The case highlights procedural safeguards available to taxpayers facing punitive GST registration cancellations and sets a precedent for restoration where livelihood concerns are demonstrably at stake.
Faulty tax calculations cost FBR Rs118b in super tax: Audit Report
Pakistan's Federal Board of Revenue (FBR) suffered a loss of Rs118 billion in super tax revenue due to faulty tax calculations, according to an audit report. The errors highlight significant administrative and computational failures within FBR's tax assessment processes. The super tax, levied on large corporations and high-income entities, was miscalculated, resulting in substantial revenue shortfalls. The audit findings raise concerns about FBR's capacity to accurately assess and collect taxes, pointing to systemic issues in Pakistan's tax administration that require urgent remediation to prevent further revenue leakage.
Breaking Down The Vote: The High Court Term In Review
A review of the U.S. Supreme Court term examining key rulings with tax implications. The High Court's decisions this term touched on significant tax-related cases, including administrative law rulings that affect how tax regulations are challenged and interpreted. The breakdown analyzes how justices voted across major cases, with particular attention to decisions impacting IRS authority, taxpayer rights, and the broader regulatory framework governing federal tax administration. The review provides insight into emerging judicial trends that will shape future tax litigation and the deference courts give to agency interpretations of tax law.
Famed Chef Hit With $1M Judgment In Boston Tax Case
A celebrated chef has been hit with a $1 million judgment in a Boston tax case, following legal proceedings related to tax obligations tied to their culinary business operations. The judgment reflects unpaid taxes and associated penalties assessed against the high-profile defendant. The case highlights the personal tax liability exposure that prominent restaurant and hospitality entrepreneurs face, including issues around income reporting, payroll compliance, or sales tax remittance. The ruling serves as a cautionary example of the financial consequences of unresolved tax disputes for individuals in the food and beverage industry.
Indictment Charges Drug Addiction Treatment Center CEO with Trying to Resell Millions of Dollars Worth of ERCs
A CEO of a drug addiction treatment center has been indicted for allegedly attempting to resell millions of dollars in Employee Retention Credits (ERCs). The case highlights ongoing federal enforcement actions targeting fraudulent ERC claims, a pandemic-era payroll tax relief program that has been widely abused. The indictment signals continued IRS and DOJ scrutiny of improper ERC transactions, including the secondary market resale of credits, which raises serious legal and tax compliance concerns. This follows a broader crackdown on ERC fraud that has resulted in numerous criminal charges across the United States.
Tax Inspectors Without Borders strengthening tax systems through new South-South co-operation
Tax Inspectors Without Borders (TIWB), a joint OECD and UNDP initiative, is expanding its South-South cooperation model to strengthen tax systems in developing countries. The programme deploys experienced tax officials from one developing country to assist another, building local audit capacity and improving tax administration. This approach enhances skills in areas such as transfer pricing, international tax, and tax audit practices. By fostering peer-to-peer knowledge sharing among Global South nations, TIWB aims to boost domestic revenue mobilisation, reduce illicit financial flows, and help countries meet sustainable development funding needs through more effective tax enforcement.
Should Sri Lanka Re-Introduce a Tax Ombudsman?
This article examines whether Sri Lanka should reinstate a Tax Ombudsman, a role previously abolished, to improve taxpayer rights and dispute resolution mechanisms. It explores the potential benefits of an independent oversight body to address grievances between taxpayers and the revenue authority. The discussion is relevant given Sri Lanka's ongoing efforts to reform its tax administration and restore public trust in the system. A Tax Ombudsman could provide an accessible, impartial avenue for resolving complaints, reducing litigation, and improving compliance. The article weighs institutional, fiscal, and governance considerations in recommending a path forward for Sri Lanka's tax administration reform.
Former Tax Preparer Ordered to Repay $1.4M in ERC Tax Fraud Case in Mississippi
A former tax preparer in Mississippi has been ordered to repay $1.4 million following a conviction related to Employee Retention Credit (ERC) fraud. The case involves fraudulent ERC claims submitted on behalf of clients, exploiting the pandemic-era payroll tax relief program. This enforcement action reflects the IRS and Department of Justice's sustained campaign against ERC fraud, which has cost the federal government billions. The repayment order underscores the serious financial and criminal consequences facing tax professionals who file false or inflated ERC claims.
Gujarat HC: Transitional VAT Credit Carried Forward to GST Not Eligible for Cash Refund
The Gujarat High Court has ruled that transitional VAT credit carried forward into the GST regime is not eligible for a cash refund. The case addresses a key transitional issue from India's 2017 shift from VAT to GST, clarifying that such legacy credits, while transferable as electronic credit ledger balances for offsetting future GST liabilities, cannot be converted into direct cash refunds. The judgment has significant implications for businesses that accumulated VAT credits prior to GST implementation and were seeking monetary refunds for unutilised transitional credit balances.
Mexico Tax Court Clarifies Contributions and Dividends
Mexico's Tax Court has issued a ruling clarifying the tax treatment of capital contributions and dividends, providing guidance on how these transactions are characterized for tax purposes. The decision addresses distinctions between contributions to equity and dividend distributions, which has significant implications for corporate taxpayers in Mexico. The clarification helps resolve ambiguity around when payments qualify as dividends subject to withholding tax versus contributions that may receive different treatment. This ruling is relevant for multinationals operating in Mexico and for structuring intercompany transactions involving Mexican entities.
The Tax Adviser: IRS outlines AI risks, Circular 230 duties for tax practitioners
The IRS has issued guidance outlining the risks associated with artificial intelligence use by tax practitioners, alongside clarifying professional responsibilities under Circular 230. The guidance addresses concerns that AI-generated tax advice or filings may contain errors, hallucinations, or unsupported positions, potentially exposing practitioners to disciplinary action. Tax professionals are reminded of their due diligence obligations when relying on AI tools, including verifying outputs and maintaining professional judgment. The IRS signals increased scrutiny of AI-assisted tax practice, placing responsibility firmly on practitioners to ensure accuracy and compliance regardless of the technology employed in preparing advice or returns.
GST Day 2026: Telangana Chief Justice Calls for an Amnesty Scheme and Online Dispute Resolution Under GST
On GST Day 2026, Telangana's Chief Justice called for the introduction of an amnesty scheme and an online dispute resolution mechanism under India's GST framework. The remarks highlight ongoing concerns about the volume of GST litigation and the need to reduce the burden on courts and taxpayers alike. An amnesty scheme would allow taxpayers to settle outstanding disputes with reduced penalties, while an online dispute resolution platform could streamline and expedite the resolution process, improving overall GST compliance and administration efficiency across India.
Silent Correction or Legislative Clarification? The Curious Case of “Person” vs “Persons” in the New Income Tax Act, 2025
This article examines a nuanced legislative drafting issue in India's new Income Tax Act, 2025, focusing on whether the use of 'person' versus 'persons' represents a silent correction or intentional legislative clarification. The distinction carries significant legal implications for tax liability, interpretation of statutory provisions, and how tax authorities may apply the law to individuals versus groups. The article explores how such seemingly minor textual changes can alter the scope of taxation, affect taxpayer rights, and potentially influence judicial interpretation and tax controversy outcomes under the revised Indian income tax framework.
Can Section 69C Be Invoked Merely Because Purchases Are Alleged to Be Bogus?
This article analyzes whether Section 69C of India's Income Tax Act — which deals with unexplained expenditure — can be invoked solely on the basis that purchases are alleged to be bogus. It examines judicial precedents and the evidentiary threshold required before tax authorities can treat expenditure as unexplained and add it back to taxable income. The article argues that mere allegations of bogus purchases, without substantive evidence, may not be sufficient to trigger Section 69C, highlighting important taxpayer protections and the standards tax authorities must meet in such controversy cases.
Karnataka HC Quashes a Single-Judge Order Directing the State to Pay Contractor’s GST Dues
The Karnataka High Court's division bench has quashed a single-judge order that had directed the state government to pay GST dues on behalf of a contractor. The case centres on whether the state, as a contracting party, bears liability for the contractor's GST obligations. The division bench overturned the lower ruling, clarifying the boundaries of state responsibility regarding contractors' indirect tax liabilities. This judgment has significant implications for government procurement contracts in India, affecting how GST obligations are allocated between public sector entities and their private contractors under the GST framework.
Lululemon Targeted In New Shopper Tariff Refund Lawsuit
Lululemon is facing a lawsuit from shoppers seeking refunds on tariffs paid on imported goods. The case targets the retailer over tariff charges passed on to consumers, raising questions about customs duty collection practices and whether retailers can lawfully pass tariff costs to customers. This lawsuit reflects growing consumer pushback against tariff-related price increases, particularly as US trade policy has imposed elevated import duties on goods from various countries. The case could have broader implications for how retailers handle and disclose tariff costs to end consumers.
IRS Signals Preparations for Potential Kwong Refunds as July 10 Deadline Approaches
The IRS is signaling preparations for potential refunds related to the Kwong case, with a July 10 deadline approaching. The Kwong litigation concerns taxpayers who may be entitled to refunds based on the court's ruling, and the IRS is taking administrative steps to process qualifying claims. Taxpayers and practitioners should be aware of the deadline and ensure any eligible refund claims are properly filed or preserved. The development has implications for tax controversy strategy, as it highlights how litigation outcomes can trigger IRS administrative action and create time-sensitive opportunities for affected taxpayers to recover overpaid taxes.
Recent ECJ and General Court VAT Jurisprudence and Implications for EU Compliance – June 2026
A review of recent European Court of Justice (ECJ) and General Court VAT jurisprudence from June 2026, analyzing key rulings and their implications for EU VAT compliance. The article examines how recent case law shapes VAT obligations for businesses operating across EU member states, covering areas such as input tax deduction, supply classifications, and cross-border transactions. Tax professionals and in-house counsel can use these insights to assess litigation risks and ensure alignment with evolving judicial interpretations of EU VAT Directive provisions.
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