Tax News Daily
The latest tax news from around the world, summarised and tagged for tax professionals. Updated twice daily.
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Multistate Tax Trends: SALT Litigator Jennifer Karpchuk on Market-Based Sourcing Frictions, Digital Ad Taxes, and Multi-Jurisdictional Audit Risks
Tax litigator Jennifer Karpchuk discusses key state and local tax (SALT) trends affecting multistate businesses in the US. The interview covers market-based sourcing frictions, where inconsistent state rules create compliance complexity for service companies determining revenue attribution. Digital advertising taxes—following Maryland's contested levy—remain a significant concern as states explore similar measures. Multi-jurisdictional audit risks are escalating as states coordinate enforcement and expand nexus assertions post-Wayfair. Karpchuk highlights the litigation landscape around these issues, offering insights into dispute resolution strategies, the importance of proactive compliance planning, and how businesses can manage exposure across differing state tax regimes.
ECJ Case: VAT refund rights protected despite electronic transmission failure
The European Court of Justice (ECJ) has ruled that VAT refund rights cannot be denied solely due to electronic transmission failures, protecting taxpayers from losing legitimate refund entitlements caused by technical or procedural issues outside their control. The case reinforces the principle that substantive VAT rights should not be forfeited on purely formal grounds, particularly where electronic filing systems malfunction. This decision has significant implications for EU businesses navigating mandatory e-filing obligations for VAT refund claims, clarifying that tax authorities must consider the underlying validity of refund claims rather than applying strict formalistic rejection based on transmission errors. Tax professionals should review refund claim procedures in light of this ruling.
UK – Mandatory Online Registration Portal for Tax Advisors
HMRC is introducing a mandatory online registration portal for tax advisers in the UK, set to launch in 2026. This initiative aims to regulate the tax advisory profession by requiring advisers to register with HMRC, enhancing oversight and accountability within the sector. The measure is part of broader efforts to combat tax avoidance and ensure that only competent, ethical professionals provide tax advice. Tax advisers operating in the UK will need to comply with the new registration requirements, which are expected to include identity verification and professional standards checks. Non-compliance could result in restrictions on advisers' ability to interact with HMRC on behalf of clients.
The UK’s Transfer Pricing Landscape Is Entering a New Era of Scrutiny
The UK's transfer pricing regime is undergoing significant transformation, with HMRC intensifying scrutiny of intercompany transactions amid legislative reforms. The article examines evolving compliance expectations, including updated documentation requirements and increased audit activity targeting multinational enterprises operating in or through the UK. HMRC is aligning closer with OECD guidelines while introducing domestic-specific requirements that demand greater transparency in related-party dealings. Tax professionals must reassess existing transfer pricing policies, particularly around intragroup services, intellectual property arrangements, and financial transactions. The piece highlights the importance of robust contemporaneous documentation and proactive engagement with HMRC to mitigate dispute risks in this heightened enforcement environment.
United Kingdom: Tribunal clarifies VAT liability for Amazon marketplace sales
A UK tribunal has issued a ruling clarifying VAT liability for sales made through the Amazon marketplace. The case addresses the complex question of who bears VAT responsibility in marketplace transactions — the platform operator or the third-party seller. This decision is significant for e-commerce businesses operating through Amazon and similar digital marketplaces in the UK, as it provides clearer guidance on VAT obligations following post-Brexit rules that made online marketplaces deemed suppliers for VAT purposes. Tax professionals advising clients on marketplace commerce should review the ruling to assess compliance obligations and potential historical VAT exposure for both platforms and sellers.
IRS proposes increase in cost of estate tax closing letter
The IRS has proposed increasing the fee for estate tax closing letters, which are issued upon completion of estate tax return examinations. These letters serve as confirmation that the IRS has accepted the estate tax return and closed the file, providing certainty for executors and beneficiaries before distributing estate assets. The proposed fee increase reflects the IRS's efforts to recover administrative costs associated with processing estate tax cases. Tax practitioners advising estates and executors should factor the revised fee into estate administration planning. The change may also prompt consideration of alternative account transcripts, which are currently available at no cost as a substitute for the closing letter.
The Scope of Personal Liability for Trust Fund Tax in the State of New York
This article examines personal liability for trust fund taxes in New York State, focusing on when individuals—such as corporate officers, directors, or employees—can be held personally liable for a business's failure to remit withheld payroll taxes. New York's Tax Law imposes 'responsible person' liability on those who willfully fail to collect or pay over withheld taxes, including sales tax and payroll withholding. The article analyzes the legal standards for determining 'responsible person' status, the willfulness requirement, and relevant case law. It provides practical guidance for tax professionals advising clients on minimizing personal exposure in trust fund tax disputes.
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