Tax News Daily
The latest tax news from around the world, summarised and tagged for tax professionals. Updated twice daily.
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VATIT Webinar – The digital VAT traps most businesses walk right into (Aug 13)
VATIT is hosting a webinar on August 13 focused on common VAT pitfalls that businesses encounter in the digital economy. The session targets companies operating across digital channels and jurisdictions, addressing frequent compliance errors related to digital VAT obligations. Topics likely include cross-border digital services, platform economy VAT rules, registration thresholds, and reverse charge mechanisms. The webinar aims to help tax professionals and businesses identify and avoid costly mistakes in digital VAT compliance. This is a practitioner-focused educational event highlighting the growing complexity of VAT rules for digital transactions across multiple jurisdictions.
Official Statistics: Preliminary estimate of the VAT gap (tax year 2024 to 2025)
The UK government has released a preliminary estimate of the VAT gap for tax year 2024 to 2025, measuring the difference between expected VAT revenues and amounts actually collected. The VAT gap is a key compliance metric used by HMRC to assess the effectiveness of VAT enforcement and identify areas of non-compliance, evasion, and avoidance. This official statistics release provides early insight into the scale of uncollected VAT in the UK economy and informs future policy and enforcement priorities for HMRC.
Deregulation 2.0 — Poland Proposes Faster VAT Verification Procedures
Poland is proposing regulatory reforms under its 'Deregulation 2.0' initiative, including measures to accelerate VAT verification procedures. The proposed changes aim to streamline and speed up the process by which tax authorities verify VAT registrations and taxpayer status, reducing administrative burdens on businesses. Faster VAT verification would improve cash flow and reduce compliance friction for companies operating in Poland. The proposal reflects broader efforts to modernize Poland's tax administration and make the country a more business-friendly environment. The reforms are still at the proposal stage and subject to legislative approval.
Brazil Updates NF-e Distribution Web Service — Support for Alphanumeric CNPJ Introduced
Brazil has updated its NF-e (Nota Fiscal Eletrônica) distribution web service to introduce support for alphanumeric CNPJ (Cadastro Nacional da Pessoa Jurídica) identifiers. This technical update reflects Brazil's broader tax identification reform, which is transitioning the CNPJ format to include alphanumeric characters. Businesses and technology providers integrating with Brazil's electronic invoicing infrastructure must update their systems to handle the new CNPJ format. The change affects the distribution and processing of electronic fiscal documents across Brazil's mandatory e-invoicing ecosystem, requiring updates to ERP systems, tax software, and API integrations used by businesses operating in the country.
Denmark Plans to Abolish VAT on Books — Zero Rate Proposed from 2027
Denmark is proposing to introduce a zero VAT rate on books, with the measure planned to take effect from 2027. The proposal would eliminate the current VAT charge on books, making them more affordable for consumers and aligning Denmark with several other EU member states that already apply reduced or zero VAT rates on publications. The move is framed as a cultural and educational policy initiative. The proposal requires legislative approval and must be compatible with EU VAT Directive rules permitting zero rates on certain supplies. If enacted, it would represent a meaningful change to Denmark's VAT rate structure.
Missed your 83(b) Election? Here’s What You Can Do
Missing the 83(b) election deadline can have significant tax consequences for employees receiving restricted property or equity compensation. An 83(b) election allows recipients to be taxed at grant rather than vesting, potentially locking in lower ordinary income tax at a favorable early valuation. If the 30-day filing window is missed, options are limited but not exhausted: taxpayers may explore relief under certain IRS procedures, assess whether the property qualifies for different treatment, or plan around the vesting schedule to mitigate tax impact. The article outlines practical steps and considerations for those who have missed this critical personal income tax planning opportunity.
Comments on ECG T-689/24: Confirms Incompatibility of Polish Input VAT Deduction Rules with EU Law
The EU General Court ruling in case T-689/24 confirms that Poland's input VAT deduction rules are incompatible with EU law. The decision addresses specific provisions in Polish VAT legislation that restrict taxpayers' ability to deduct input VAT, finding these restrictions breach the EU VAT Directive. This ruling has significant implications for Polish businesses that may have been denied VAT deductions under the non-compliant rules, potentially opening avenues for refund claims. It also puts pressure on Polish authorities to amend domestic VAT legislation to align with EU requirements. The case adds to a line of EU jurisprudence disciplining member state deviations from harmonized VAT rules.
Upper Tribunal allows HMRC appeal: Invisalign aligners are NOT “dental prostheses” and are standard-rated
The UK Upper Tribunal has ruled in favour of HMRC, overturning a lower decision by finding that Invisalign dental aligners do not qualify as 'dental prostheses' for VAT exemption purposes. As a result, the aligners are subject to standard-rate VAT rather than the zero or reduced rate applicable to dental prostheses. The case has significant implications for the orthodontic and dental device industry, clarifying the boundary of VAT relief for medical and dental products in the UK and potentially affecting how similar products are classified going forward.
“kas fiskalnych?” Government proposes a free e-receipt app for entrepreneurs
The Polish government has proposed introducing a free e-receipt application for entrepreneurs, aimed at replacing or supplementing traditional fiscal cash registers ('kasy fiskalne'). The initiative is designed to simplify compliance for small businesses and entrepreneurs by digitising the receipt issuance process. The proposal reflects Poland's broader push toward electronic invoicing and digital tax reporting infrastructure, reducing administrative burdens while enhancing tax authority oversight of retail transactions and VAT collection at the point of sale.
NHR API update on 12 August 2026 (JSON response structure)
An API update scheduled for 12 August 2026 will affect the JSON response structure of the NHR (Non-Habitual Resident) system, indicating changes to a tax reporting or e-invoicing technical interface. This update is relevant for developers and tax technology teams integrating with the NHR API, requiring adjustments to systems that consume the JSON output. The change suggests ongoing digital modernisation of tax administration infrastructure, likely in Portugal, where the NHR regime and related digital tax systems are actively maintained and updated.
E-commerce: EU abolishes the €150 de-minimis and introduces a €3 flat-rate customs duty
The EU is abolishing the €150 customs duty de-minimis threshold for e-commerce imports, replacing it with a €3 flat-rate customs duty on low-value parcels. This significant reform targets the surge in low-value imports, particularly from non-EU online marketplaces, closing a loophole widely exploited by large e-commerce platforms. The change levels the playing field for EU retailers and is expected to generate substantial customs revenue while reducing the administrative burden of individual parcel valuation. Online marketplaces and logistics operators will need to adapt their compliance frameworks accordingly.
Electronic VAT refund procedures for foreigners from 1 July 2026
From 1 July 2026, electronic VAT refund procedures have been introduced for foreign visitors, streamlining the process of reclaiming VAT on purchases made during their stay. The digitalisation of the refund mechanism replaces or supplements paper-based processes, improving efficiency for both taxpayers and tax authorities. The reform is aimed at enhancing the tourist and business visitor experience while improving oversight and reducing fraud in the VAT refund system. The specific country of implementation is not explicitly stated but the change represents a meaningful administrative modernisation of cross-border VAT compliance.
N.Y. Times: Microsoft Disclosure Provides Rare Glimpse of Tax Haven Tactics
The New York Times reports on a rare Microsoft disclosure revealing the company's use of tax haven strategies to minimize its global tax burden. The disclosure offers an unusual window into how multinational corporations structure operations across low-tax jurisdictions to reduce corporate income tax liabilities. Microsoft's arrangements reportedly involve routing profits through subsidiaries in favorable tax jurisdictions, raising questions about transfer pricing practices and the effectiveness of international tax reform efforts including Pillar Two. The case highlights ongoing tensions between aggressive tax planning by large multinationals and government efforts to ensure fair taxation.
How to Prepare for a VAT Audit
Preparing for a VAT audit requires businesses to maintain thorough documentation and organised records to ensure compliance. Key steps include reviewing VAT returns for accuracy, reconciling VAT accounts with financial statements, and ensuring all invoices meet regulatory requirements. Businesses should conduct internal pre-audit checks, identify and correct discrepancies proactively, and ensure staff understand VAT obligations. Having clear audit trails for input and output tax claims is essential. Engaging a tax advisor to review processes before an audit can reduce risk. Prompt responses to auditor queries and transparent cooperation with tax authorities are critical to achieving a smooth audit outcome.
Policy paper: Capital Goods Scheme simplification
The UK government has published a policy paper on simplifying the Capital Goods Scheme (CGS), a VAT mechanism that requires businesses to adjust input tax recovery on certain high-value capital assets over a period of years as their use changes. The simplification proposals aim to reduce administrative burdens on businesses by streamlining the adjustment calculations and record-keeping requirements associated with the CGS. This is relevant to UK VAT-registered businesses holding qualifying capital assets such as land, buildings, and computer equipment.
Why C Corporations Are Back: The QSBS Advantage Explained
This article examines the resurgence of C Corporations among startups and investors due to the Qualified Small Business Stock (QSBS) exemption under Section 1202 of the US tax code. QSBS allows eligible shareholders to exclude up to 100% of capital gains—up to $10 million or 10x their basis—from federal tax when selling stock in qualifying C Corporations held for more than five years. The piece outlines eligibility requirements, including active business and gross asset thresholds, and explains why the tax advantage is driving founders and early investors to favor C Corps over pass-through entities like LLCs.
Submit your Soft Drinks Industry Levy return
HMRC has issued guidance on submitting returns under the UK's Soft Drinks Industry Levy (SDIL), a sector-specific tax on producers and importers of sugar-sweetened beverages. The guidance covers the process for completing and filing SDIL returns, including reporting volumes of liable drinks, calculating the levy due, and meeting submission deadlines. The SDIL applies at different rates depending on sugar content, and compliance with return obligations is mandatory for businesses that manufacture or import soft drinks in the UK.
Notice: Notices made under The Customs (Import Duty) (EU Exit) Regulations 2018
HMRC has published notices made under The Customs (Import Duty) (EU Exit) Regulations 2018, which govern the UK's post-Brexit customs import duty framework. These notices form part of the legal infrastructure establishing how import duties are assessed, collected, and administered following the UK's departure from the European Union. The regulations cover tariff classifications, duty rates, and procedural requirements for importers bringing goods into the UK. Such notices are legally significant for businesses engaged in cross-border trade, as they directly affect customs duty liabilities and compliance obligations for imports into Great Britain.
Interim Tax Reporting: Avoiding Surprises in the Quarters
Interim tax reporting requires companies to estimate their annual effective tax rate and apply it to year-to-date income each quarter, a process fraught with complexity. Surprises often arise from discrete items, changes in forecasted annual income, valuation allowances, or jurisdictional mix shifts. The article outlines best practices for avoiding unexpected tax provisions in quarterly financial statements, including maintaining updated forecasts, monitoring legislative changes, and ensuring close collaboration between tax and finance teams. Accurate interim reporting is critical for corporate income tax compliance and investor confidence, particularly for public companies subject to ASC 740 interim period reporting requirements.
Guidance: Employment intermediaries: service availability and issues
HMRC provides guidance on service availability and known issues affecting the Employment Intermediaries reporting service. Employment intermediaries, such as staffing agencies and umbrella companies, are required to report details of workers they place with clients where PAYE is not operated. This guidance helps intermediaries and their agents stay informed of system outages or technical problems that may affect their ability to submit mandatory returns. Timely reporting is a payroll tax compliance obligation, and awareness of service disruptions is important to avoid penalties for late or failed submissions.
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